Market update: Pearson and HSBC make FTSE 100 headway, BP falls
10:38 , Graeme Evans
Top marks for Pearson and forecast-beating HSBC today contrasted with a results-day setback for BP near the foot of the FTSE 100 index.
Asia-focused HSBC provided the session’s stand-out performance after reporting a 10% rise in third quarter profits to $8.5 billion (￡6.5 billion).
Buoyed by strong trading in FX, equity and debt markets and increased client activity for its wealth division, HSBC’s profit haul beat City forecasts by 12%.
The company left full-year guidance unchanged but pleased investors by pledging to buy back $3 billion of its shares over the next four months.
Georges Elhedery, who became chief executive in early September, said: “We delivered another good quarter, which shows that our strategy is working.”
Shares jumped 5% or 32.2p to 724.3p as the best performing stock in the FTSE 100, ahead of the 3% results-day advance for Pearson.
The coursework and virtual learning business reported 5% underlying sales growth for the quarter, keeping it in line with expectations for the full year.
Chief executive Omar Abbosh highlighted the company‘s progress developing AI capabilities and its expansion in workforce learning.
Shares rose 36p to 1107.5p, their highest in a decade and up 10% in the past month.
Other strongly performing stocks in the FTSE 100 included Asia-focused Prudential and Standard Chartered amid the read-across from the HSBC results.
The FTSE 100 index rose by 31.25 points to 8316.87, adding to Monday’s 0.5% advance following a robust handover from Wall Street markets.
BP shares dropped another 8.7p to 390.4p even though its third quarter profits haul of $2.3 billion (￡1.7 billion) came in 11% above the City consensus.
The result compares with $3.3 billion for the same quarter last year, reflecting ongoing pressure on refining margins and a lower oil price.
It intends to buy back another $1.75 billion of its shares, although City worries over the level of 2025 distributions has contributed to the FTSE 100 heavyweight losing 25% of its value over the past six months.
CEO exit hits shares of Apple supplier IQE
09:09 , Graeme Evans
Shares in IQE have fallen by 16% after the semiconductor wafers firm said chief executive Americo Lemos had left the company with immediate effect.
Cardiff-based IQE, whose products are found in Apple iPhones, recently lowered full-year guidance due to the lumpy pace of recovery in industry conditions.
Lemos joined IQE from New York-based GlobalFoundries in January 2022.
IQE said new board member Mark Cubitt will become executive chair, with former Intel executive Jutta Meier interim CEO in addition to her finance role.
A search for a permanent chief executive is underway.
The AIM-listed shares fell 2.3p to 12.3p, in sharp contrast to 170p in 2017 when the company’s value soared due to its exposure to the iPhone boom.
IQE chair Phil Smith said: "Whilst IQE continues to navigate the semiconductor market recovery, we are confident that the company's renowned technical expertise is well aligned to long-term growth market vectors.”
FTSE 100 higher but BP shares continue to struggle
08:16 , Graeme Evans
BP shares remain under pressure, despite today’s results beating expectations.
The oil giant, which has lost 15% of its value this year, fell another 1% or 3.65p to 395.05p this morning. Shell, which reports on Thursday, rose 5p to 2521p.
Pearson fared better as its shares rose 17.6p to 1089.1p following an in-line third quarter trading update. With HSBC shares up 3%, the FTSE 100 index stood 36.78 points higher at 8285.62.
HSBC shares rise after Q3 profit beat
08:03
HSBC shares are 2% or 13.5p higher at 705.6p after today’s profits haul of $8.5 billion easily beat City forecasts and it announced a fresh $3 billion buyback.
Strong trading activity in FX, equity and debt markets helped to propel investment banking fees, while Chinese stimulus increased client activity for the wealth division.
Hargreaves Lansdown senior equity analyst Matt Britzman said: “The new buyback, while expected, will still be taken as a positive and speaks to the work HSBC has done in recent times to optimise the capital structure and strip out some non-core assets.
“Looking ahead, net interest income will come under more scrutiny as rates in the US no longer act as a tailwind, and loan growth looks to be a challenge.”
Pearson sales rise, flags progress on AI and workforce learning
07:52 , Graeme Evans
Pearson is on track to meet full-year expectations after the coursework and virtual learning business reported 5% sales growth for the third quarter.
In today’s update, chief executive Omar Abbosh highlighted the commercial benefit of Pearson's recent acceleration of its AI capabilities.
He added that relationships with companies such as ServiceNow showed progress on Pearson’s intention to expand in workforce learning.
All divisions grew in the third quarter to leave underlying sales 3% higher over the first nine months of the financial year.
BP profits decline amid refining pressure
07:35 , Graeme Evans
BP today recorded a profit of $2.3 billion (￡1.7 billion) in the three months to the end of September, down from $2.8 billion in the previous quarter.
The performance, which has been impacted by weaker refining margins and the decline in oil price, compares with $3.3 billion seen a year earlier.
BP announced an unchanged dividend of eight US cents a share and said it intended to buy back another $1.75 billion of its shares.
Chief executive Murray Auchincloss said: “We have made significant progress since we laid out our six priorities earlier this year to make BP simpler, more focused and higher value.
“In oil and gas, we see the potential to grow through the decade with a focus on value over volume.
“We also have a deep belief in the opportunity afforded by the energy transition - we have established a number of leading positions and will continue high-grading our investments to ensure they compete with the rest of our business.
“I am absolutely clear that the actions we are taking will grow the value of BP.”
Lending giant HSBC today beat City forecasts by reporting a 10% rise in third quarter profits to $8.5 billion (￡6.5 billion).
The performance follows a 5% rise in revenues to $17 billion (￡13.1 billion), partly driven by growth in Wealth and Personal Banking.
The bank announced a dividend of 10 US cents a share and said it would buy back another $3 billion (￡2.3 billion) of its shares over the next four months.
Georges Elhedery, who became chief executive at the start of September, said: “We delivered another good quarter, which shows that our strategy is working.”
The results come a week after he laid out an overhaul of the bank’s organisational structure, including two divisions focused on the UK and Hong Kong.
Elhedery added: “We will begin to implement these plans immediately and will share further details as part of a business update alongside our full-year results in February.”
FTSE 100 seen higher after strong US session, oil price steadies
07:00 , Graeme Evans
A robust handover from Wall Street means the FTSE 100 index is set to build on Monday’s progress, with futures pointing to a rise of 30 points to 8316.
At the start of a busy week for corporate results, the Dow Jones Industrial Average rose 0.7% and the S&P 500 index lifted 0.3%.
On commodity markets, Brent Crude futures have steadied at $71.33 a barrel after falling 6% in yesterday’s session.
