IAG operating profit up; Pearson trading in line
London’s FTSE 100 was seen starting 57 points lower than Thursday’s close at 6,265.
Stocks to watch
Airline group IAG said first quarter operating profits were €155m before exceptional items compared with €25m in 2015. Pre-tax profits were up to €124m from a loss of €37m.
Results were boosted by a €181m contribution from Irish carrier Aer Lingus which was acquired in August last year.
Chief executive Willie Walsh said January and February revenues were in line with Q4 2015 trends. March revenue was affected by the timing of Easter and the Brussels terrorist attacks with the latter continuing into the second quarter, he added.
The group also expects to reduce its underlying ex-fuel unit costs for the full year by around 1% and expects to generate an absolute operating profit increase similar to 2015.
Education publisher Pearson was trading in line with expectations in the first quarter, it reported on Friday, with adjusted operating profit and adjusted earnings per share before the costs of restructuring still expected to be £580-£620m and 50p-55p respectively.
The FTSE 100 firm’s sales, which are usually significantly weighted towards the second half of the year, were down 4% in underlying terms in the first three months of 2016. Revenues declined 9% at constant exchange rates, which the board said reflected underlying revenue declines and a change in the revenue model at Connections Education.
“"Pearson has had a solid start to the year, in line with our expectations. We are making good progress on our simplification plan and in our work to have a bigger impact on student learning, which will in turn support our future growth,” said chief executive John Fallon.
In the press
Billionaire investor Carl Icahn, who was among Apple’s largest outside shareholders, said on Thursday that he no longer held a position in the technology company. “We no longer have a position in Apple,” he said on CNBC, a US business news television network, adding that he still believed it was a “great company”. Mr Icahn cited concerns about China’s attitude towards the company, saying that Beijing could “come in and make it very difficult for Apple to sell there”. – Financial Times
Goldman Sachs looks set to be dragged into the growing storm over the collapse of BHS. The House of Commons Business, Innovation and Skills select committee said it will launch an inquiry into what checks were taken to ensure Dominic Chappell and his consortium of mystery investorswere the right buyers of the retailer. – Telegraph
Investors intensified the fight against high pay for poor performance in a bruising day of shareholder activism at some of Britain's biggest companies. As a succession of FTSE 100 and 250 companies saw revolts against remuneration, Weir Group became the new poster boy of institutional shareholders' anger in this area. – Telegraph
Nurofen manufacturer Reckitt Benckiser has been fined $1.7m for misleading customers about its range of specific pain products, which were marketed as targeting different types of pain despite containing the same active ingredient. Judge James Edelman ordered the penalty in a judgement delivered in the Federal Court in Sydney on Friday after making the ruling of misconduct in December. – Guardian
US close
US stock indices closed with a late, steep fall into the red on Thursday after the Federal Reserve held interest rates steady but official data showed economic growth slowed surprisingly in the first quarter.
As they tumbled over the finish line, the Dow Jones Industrial Average was down 1.17% at 17,830.76, the S&P 500 and Nasdaq both lost early gains to fall 0.92% to 2,075.81 and 1.19% to 4,805.29 respectively.
It was the Dow's largest drop since mid-February, with all stocks led into the red by a continued fall in Apple as the gravity of its first-quarter sales wobble led to influential activist investor Carl Icahn selling his entire stake and citing worries about a slowdown in demand from China.