IAG reports record third-quarter profit, NatWest operating profit improves

London open

The FTSE 100 is expected to open 18 points higher on Friday, having closed down 0.81% on Thursday at 7,354.57.

Stocks to watch

British Airways owner IAG reported a record third-quarter profit of €1.745bn on Friday, driven by increased capacity, higher passenger unit revenue and cost management. The FTSE 100 company said it had also reduced gross debt, receiving an investment-grade rating from S&P. Looking at the full year, it anticipated a strong margin recovery, operating profit and capacity, moving closer to pre-Covid levels.

NatWest delivered an operating profit before tax of £1.33bn for the third quarter, up from £1.09bn a year earlier, and an improved return on tangible equity of 14.7%. “Today's third-quarter results show that NatWest is a strong bank which is performing well, generating sustainable profits and returns,” said chief executive Paul Thwaite.

Newspaper round-up

Profits almost tripled at Amazon in the latest quarter as consumers continued to spend heavily despite the sharp rise in interest rates. The world’s largest retailer forecast that sales would continue to rise at a robust pace for the rest of the year. Growth had been knocked by surging prices and customers returning to bricks-and-mortar stores. – Guardian

Controversial plans to expand the All-England Club’s grounds, which host the Wimbledon championships, have been approved by local council leaders. Merton council’s development and planning application committee voted on Thursday night to approve the application to expand the tennis complex. – Guardian

Michael Gove has told councils to ditch four-day working weeks or face financial penalties. The department for Levelling Up, Housing & Communities (DLUHC), led by Mr Gove, issued new guidance on Thursday criticising shorter working weeks that fail to deliver “value for money” for taxpayers. It said councils choosing to ignore the advice were now “on notice”, saying the policy of allowing four-day weeks on full pay should be axed “immediately”. – Telegraph

EY’s army of auditors and consultants in Britain generated more fees than ever over the past year, despite the distraction of its failed break-up plan. The Big Four firm’s UK revenues climbed by 16 per cent to £3.76 billion in the year to the end of June, surpassing its previous record of £3.23 billion in 2022. Pre-tax profits rose to £659 million, up 4 per cent from £634 million last time around. – The Times

Sir Paul Marshall will seek to emulate the business model of The New York Times with a significant expansion of the Telegraph in the United States if he prevails in the bidding war for the British newspaper group. The hedge fund tycoon is drawing up plans to target a market of about 100 million centre-right American voters with a substantial investment in the Telegraph’s overseas operations. – The Times

US close

Major indices closed lower on Thursday as Meta Platforms joined Alphabet in underwhelming the market with its quarterly earnings.

At the close, the Dow Jones Industrial Average was down 0.76% at 32,784.30, while the S&P 500 was 1.18% lower at 4,137.23 and the Nasdaq Composite saw out the session 1.76% weaker at 12,595.61.

The Dow closed 251.63 points lower after Facebook and Instagram owner Meta beat analysts' forecasts but failed to impress with its fourth-quarter guidance and worrying investors with comments about a "softening" ad market.

Meanwhile, the latest batch of economic data was also somewhat mixed when looking at the details of the reports, with US GDP growth hitting an annualised pace of 4.9% during the third quarter, as household spending leapt higher - ahead of consensus estimates for a print of 4.0% and up from 0.8% over the previous three months.

Furthermore, the core PCE price deflator slowed to 2.4% (consensus: 2.5%), its slowest pace of gains since the last quarter of 2019.