Trending tickers: Apple | Adidas | BP | International Consolidated Airlines | IHG
A look at the stocks making headlines on Friday
Shares in Apple were up nearly 5% on Friday after the technology giant reported fiscal second-quarter earnings which topped analysts’ expectations with EPS hitting $1.52 per share versus estimates for $1.43.
The company also posted revenue of $94.84bn on Thursday, which was also ahead of forecasts for $92.96bn. Its gross margin came in at 44.3%, again outpacing consensus estimates.
“This was largely thanks to a ‘significant acceleration’ in iPhone sales which make up more than half of the tech giant’s overall revenue,” Victoria Scholar, head of investment at Interactive Investor, said.
Read more: Apple earnings vibe check: The call wasn't all 'roses and daisies'
“However other hardware such as Mac sales disappointed, falling 31% and iPad revenues fell 13% year-on-year as the pandemic era tech boom (when we were glued to our devices at home) fades.
"Apple is trying to focus more on services such as Apple TV+, Apple Music and Apple Pay. This division saw revenues reach another record high, up 5.5% to $20.91 billion despite the macroeconomic headwinds,” Scholar added.
Shares in Adidas climbed nearly 8% on Friday after the sportswear company reported first-quarter sales of €5.27bn, beating analysts’ expectations, thanks to strong demand for the Terrace shoe as well as the Samba and Gazelle.
Meanwhile, its operating profit hit €60m, quadrupling consensus forecasts for €15m. However, it still reported a net loss from continuing operations of €24m. Moreover, gross margins declined
“There appears to be green shoots of optimism for the sportswear giant which is still reeling from the Yeezy / Kanye West crisis after its partnership with Ye ended last year. This resulted in a €400m dash to sales, hitting North America hardest and leaving Adidas with a huge pile of unsold shoe inventory,” Victoria Scholar commented.
Read more: FTSE 100 and European stocks open higher with interest rates still in focus
Chief executive, Bjorn Gulden, also said that 2023 will be a “bumpy year” and the loss of Yeezy was hurting the business’.
Adidas has also been struggling with cost inflation and the softening consumer backdrop which has led to greater discounting.
“Although shares fell sharply in October after its Yeezy deal terminated, shares have been rebounding over the last six months. Investors are also optimistic about new CEO Bjørn Gulden thanks to his impressive CV including his recent nine-year term at Puma at which he helped spearhead the brand’s revival,” Scholar added.
The energy giant was top of the FTSE 100 basket on Friday morning with its stock up 3.21%.
It comes after the energy giant reported a first-quarter profit of $4.96bn on Tuesday, which beat analysts’ expectations of $4.3bn.
The figure was lower than the same period last year as oil and gas prices stabilised from the volatility that drove 2022's record-breaking profits across the sector.
BP said the strong results were a result of an “exceptional” performance in gas marketing and from oil trading, which offset lower energy prices and refining margins.
The group also announced a share buyback of $1.75bn.
International Consolidated Airlines Group (IAG.L)
Shares in International Consolidated Airlines went up 3.06% to put it near the top of the FTSE 100 basket in morning London trade.
It comes after the British Airways owner, which also owns Iberia and Aer Lingus, said on Friday strong ticket sales for summer and a winter season that beat expectations meant 2023 profit would come in above its previous forecasts.
As a result, the group said it now expected annual profit to come in above the top end of the €1.8-2.3bn range given in February.
AJ Bell investment director Russ Mould said: “The company is benefiting in two ways. Easing oil prices have helped with fuel costs while passenger demand has been robust.
“Crucially, and despite the pressures on household budgets, jetting away continues to be prioritised when it comes to spending decisions and bookings are healthy.”
Mould also highlighted that debt remains very elevated – a consequence of COVID-19 – and the return of the dividend next year, which is roughly what has been guided, would be true evidence its chief executive, Luis Gallego, has successfully piloted a flight path to recovery.
“There is one fly in the ointment. The rebound in business travel, an important area for the group, remains sluggish and three years on from the start of the pandemic there may be fears this is becoming a structural issue with companies no longer as willing to fund these kinds of trips as regularly,” Mould also noted.
Intercontinental Hotels Group (IHG.L)
The British hospitality company was bottom of the FTSE basket at the time of writing with its stock down 2.39%.
It comes following news that the group’s chief executive, Keith Barr, will step down from his position at IHG on 30 June and will be replaced by Elie Maalouf, the current Americas CEO on 1 July.
Victoria Scholar, head of investment at Interactive Investor, commented: “Barr will remain available to support and advise the business until the end of the year. He has been CEO since July 2017 and on the executive committee since April 2011. Barr helped steer the hotel group through the extreme challenges of the pandemic and Brexit with shares up around 30% under his near six-year tenure, sharply outperforming the FTSE 100,” she said.
Scholar also noted how he recently chimed in on the debate about London’s position as a global financial hub after Brexit saying it is ‘not a very attractive place to list new companies’ but IHG remains listed on the LSE nonetheless.
“IHG reported revenue per available room (RevPAR) which is calculated by multiplying average daily room rates by occupancy rates up by 33% year-on-year and 6.8% versus 2019 as the group behind Holiday Inn hotels enjoys a post-pandemic bounce back.
"Greater China was a bright spot with RevPAR up 75% thanks to Beijing’s removal of its anti-COVID lockdown measures and the release of pent-up demand from the world’s second largest economy,” Scholar added.
Furthermore, business and group travel continues to bounce back post COVID-19. However, IHG flagged the ongoing economic uncertainties and said financing challenges are holding back new hotel development activity and the wider real estate industry.