FTSE 100 movers: ARM surges but Pearson slumps as it cuts guidance

London’s FTSE 100 was up 0.3% to 6,365.27 at 1400 BST, bouncing back from early declines as investors cheered better-than-expected public finance figures.

ARM Holdings was the standout gainer after the chip designer posted a jump in third-quarter pre-tax profit as revenue grew on the back of premium chip pricing and the broadening adoption of its technology. The company, which designs chips for Apple and Samsung, also said it has entered the final quarter of the year with strong royalty momentum.

Third-quarter pre-tax profit rose 27% on a normalised basis from the same period last year to £128.4m, on revenue of £243.1m, up 24%.

Merlin Entertainments was also a high riser after announcing a joint venture with state-backed China Media Capital to develop a Legoland Park in Shanghai, among other attractions in China. As well as Legoland, the partnership will roll out several of Merlin's 'Midway' brands throughout China, including the adaption and localisation of existing and proven Merlin brands such as 'The Dungeons' and selected 'Legoland Discovery Centers' for the Chinese market.

Broadcaster Sky was on the front foot as it reported a strong first quarter book, with new paid-for subscription products boosting the company’s revenue.

Revenue for the quarter to 30 September was up 6% from last year at £2.8bn, while operating profit rose 10% to £375m.

Technology firm Smiths Group got a boost after Citigroup raised the stock to ‘buy’ from ‘neutral’ and lifted the price target to 1,200p from 1,050p to reflect an improved pension position and stability in the medical and detection businesses. The bank said it sees several areas of upside optionality at Smiths which the market is not pricing appropriately.

Citi said a new chief executive offers a fresh perspective to address Smiths’ corporate strategy, reassess medium-term targets in light of low global industrial growth and develop options to realise value.

Consumer goods company Reckitt Benckiser rallied after lifting its full-year like-for-like sales growth estimate to 5% from a previous range of between 4% and 5% as it posted better-than-expected third-quarter revenue. The group reported third-quarter LFL growth of 7% to £2.20bn, topping analysts’ expectations of around 5.2%.

On the downside, Bunzl slid as the distribution group’s third-quarter results failed to impress. The company saw underlying revenue remain stuck flat against last year, with a new Canadian acquisition announcement not lifting sentiment. Thanks to acquisitions, Bunzl said its revenue for the third quarter had increased 4% on the same period last year, which it argued was consistent with the guidance it had given at its half-year results announcement in August.

Education group Pearson was also in the red after saying underlying sales fell 4% in the third quarter and cutting its guidance for the full year by 5p to 70p-75p. The company said some of its largest markets were weakened by "cyclical and policy related factors", in particular, including lower college enrolments in the US and lower textbook purchasing in certain South Africa provinces.

Risers

ARM Holdings (ARM) 1,040.00p 8.00%
Merlin Entertainments (MERL) 388.20p 4.47%
Sky (SKY) 1,104.00p 3.27%
CRH (CRH) 1,782.00p 3.24%
Smiths Group (SMIN) 1,012.00p 2.17%
Reckitt Benckiser Group (RB.) 6,277.00p 2.16%
Ashtead Group (AHT) 960.00p 2.02%
Royal Dutch Shell 'B' (RDSB) 1,828.50p 1.98%
Rolls-Royce Holdings (RR.) 686.00p 1.78%
BP (BP.) 383.20p 1.77%

Fallers

Pearson (PSON) 1,002.00p -15.66%
Bunzl (BNZL) 1,795.00p -2.71%
Anglo American (AAL) 614.60p -1.35%
AstraZeneca (AZN) 3,979.50p -1.12%
Antofagasta (ANTO) 552.00p -1.08%
Barclays (BARC) 249.95p -1.05%
WPP (WPP) 1,439.00p -1.03%
Centrica (CNA) 236.30p -0.80%
ITV (ITV) 248.80p -0.80%
GlaxoSmithKline (GSK) 1,326.00p -0.79%