IAG profits fly higher than expectations, Smith & Nephew keeps outlook unchanged
London open
The FTSE 100 is expected to open 18 points lower on Friday, after closing down 0.19% at 7,248.10 on Thursday.
Stocks to watch
British Airways owner International Consolidated Airlines Group (IAG) reported first quarter profits well ahead of expectations as a drop in costs offset lower passenger revenues. Operating profits in the first three months of the year of €170m before exceptional items were up 10% on the same period last year.
Smith & Nephew said its full year outlook for underlying revenue growth remained unchanged in the 3%-4% range after posting flat first quarter revenue of $1.14bn, flat on a reported basis after -2% impact from the disposal of its gynaecology business and -1% currency headwind. Revenue was up 3% on an underlying basis.
Low-cost airline easyJet posted its passenger statistics for April on Friday, with total passenger numbers up 11.7% at 7.12 million, and its load factor rising 2.5 percentage points to 92.9%. The FTSE 100 carrier’s total passenger numbers over the rolling 12 months to 30 April were up 7.8% at 76.68 million, with its load factor improving 0.5 percentage points to 91.9%.
Newspaper round-up
Amazon is to more than triple its research and development team in Cambridgeworking on tech innovations such as its Alexa digital assistant, delivery drones and Echo smart speaker. The US online retailer is opening a new building in the city with room for 400 experts in mathematical modelling, speech science, machine learning and “knowledge engineering”. – Guardian
Retail Acquisitions, the former owner of the collapsed BHS, is on the point of liquidation, potentially helping investigations into the demise of the department store chain. The group, which bought BHS for £1 in 2015 and was fronted by former bankrupt Dominic Chappell, has been accused of extracting an estimated £17m from BHS despite owning it for just 13 months before it went into administration in 2016. An estimated £6m was owed by Retail Acquisitions to BHS when it collapsed. – Guardian
Activist investor Elliott Advisors will fire the latest salvo in the tug-of-war over Dulux owner Akzo Nobel by claiming the Dutch company’s plan to remain independent could result in four times more job losses than if it was taken over by US rival PPG Industries, The Daily Telegraph understands. Elliott, which owns a stake of more than 3pc in Akzo, has been leading the charge in pushing the company to engage with PPG, which has made three takeover bids for the paints giant. – Telegraph
Activist investor Gatemore has said it now has enough support from other shareholders in logistics company DX Group to block its mooted deal with rival John Menzies. Gatemore holds 11pc of the shares in DX but says it now has the public support of 18pc of the shares, including its stake, opposed to the deal and the private backing of an additional 20pc of stakeholders. – Telegraph
The European Commission has embarked on another attempt to claim the City’s vast and lucrative euro clearing market in a move that could jeopardise 80,000 jobs. London’s status as a global centre for euro-denominated derivatives has been thrown into fresh doubt by Brexit. – The Times
Claire Jenkins, a non-executive director of Sports Direct, has resigned amid speculation that she was frustrated at being unable to influence the actions of the struggling sportswear retailer. She is leaving after six years at Sports Direct which has been embroiled in a scandal over working practices at its Shirebrook warehouse in Derbyshire. – The Times
US close
US stocks ended a choppy session little changed on Thursday as energy shares were dragged lower by weaker oil prices, and after the House of Representatives passed a healthcare overhaul.
The Dow Jones Industrial Average closed flat at 20,951.47, while the S&P 500 and the Nasdaq eked out a 0.1% gain to 2,389.52 and 6,075.34, respectively.
Energy shares were under pressure as oil prices tanked amid concerns that OPEC and other producing countries would not take further steps to reduce the glut of crude.
West Texas Intermediate was down 5% to $45.54 a barrel and Brent crude was off 4.8% at $48.45.
IG analyst Joshua Mahony said: “Oil prices took yet another turn for the worst today, as Brent hit the lowest level since November 2016.
“Yesterday’s smaller than expected drawdown in US crude stocks adds weight to the notion that despite continued compliance in recent crude cuts, the surplus is here to stay.”