BT reiterates full-year targets, AstraZeneca hikes guidance

London open

The FTSE 100 is expected to open 39 points lower on Thursday, having closed down 0.17% on Wednesday at 8,153.69.

Stocks to watch

BT reiterated full-year targets after what it called a “solid start” to the year, with strong growth in fibre and customer numbers, though revenues were held back by a weaker performance in the business division. Adjusted revenues in the first quarter ended 30 June were down 2% at £5.1bn due to legacy managed contract declines, reduced low margin sales activity and contraction in the portfolio unit within business. The continued shift to mobile SIM only and a lower CPI benefit in a competitive market in the consumer division also weighed on the top line. Adjusted EBITDA rose by just 1% to £2.1bn.

AstraZeneca reported an 18% increase in total revenue for the first half on Thursday, reaching $25.6bn, driven by significant growth in product sales and alliance revenue. The FTSE 100 pharmaceuticals giant saw 22% growth in revenue from oncology, CVRM, and R&I, while rare disease revenue grew by 15%, with a core operating margin of 33% and a core earnings per share increase of 5% to $4.03. AstraZeneca declared a seven-cent increase in its interim dividend and raised its full-year 2024 guidance, expecting mid-teens percentage growth in total revenue and core earnings per share at constant exchange rates.

Newspaper round-up

Thames Water has breached its licence to supply water to nearly 16 million people after some of its debt was downgraded to junk status. The regulator Ofwat could now fine Thames, the country’s largest water monopoly, up to 10% of its annual turnover, equating to hundreds of millions of pounds. However, since the company is already teetering close to temporary renationalisation, Ofwat is likely to hold off on any immediate large fines. – Guardian

As many as 320,000 UK adults have been pushed into poverty by soaring mortgage costs after the sharpest increase in interest rates since the 1980s, a leading think tank has said. Highlighting the damage caused by Britain’s exploding mortgage timebomb, the Institute for Fiscal Studies (IFS) said individuals who needed to renew their home loans or take out new ones in the past two years had experienced a sharp fall in their disposable income. – Guardian

An Abu Dhabi-backed firm has invested $100m (£77m) in one of Britain’s biggest microchip companies as the Gulf state seeks to become a major player in artificial intelligence (AI). Fortress Investment Group, majority owned by Abu Dhabi’s wealth fund Mubadala Capital, has backed Imagination Technologies with a loan that can convert to equity in the company over time. – Telegraph

Top partner pay at Clifford Chance inched up by £40,000 to average £2.04 million as the City law firm reported its best financial performance for seven years. The “magic circle” firm announced that revenue for the year finishing at the end of last April rose by 9 per cent to £2.3 billion, the highest increase since 2017. That generated an overall partnership profit of £856 million, an annual increase of 10 per cent. – The Times

UK car production fell by 7.6 per cent in the first six months of the year, as manufacturers retooled their factories towards electric vehicle production. According to the Society of Motor Manufacturers and Traders (SMMT), factories turned out 416,074 new models, 34,094 fewer than in the same period in 2023. The fall in overall car production was driven by a significant decline in exports, while the number of cars produced for the UK market actually expanded by 17.7 per cent year-on-year to 106,157 in the first six months of 2024. Cars produced for export fell by 13.9 percent to 309,917 vehicles. – The Times

US close

Wall Street stocks closed sharply lower on Wednesday after investors got their first taste of Q2 big tech earnings overnight and thumbed over a number of data points.

At the close, the Dow Jones Industrial Average was down 1.25% at 39,853.87, while the S&P 500 lost 2.31% to 5,427.13 and the Nasdaq Composite saw out the session 3.64% lower at 17,342.41.

The Dow closed 504.22 points lower on Wednesday, extending losses recorded in the previous session.

Google parent company Alphabet met expectations with its latest quarterly earnings report after the close but YouTube advertising revenues fell short of estimates, while electric carmaker Tesla's quarterly earnings nearly halved as a 7% year-on-year drop in revenues and price cuts put pressure on profits.

On the macro front, US mortgage applications fell 2.2% in the week ended 19 July, according to the Mortgage Bankers Association, trimming the previous week's 3.9% increase.