Newsquawk Daily European Equity Opening News - 31st July 2024

31st July 2024

ASIA

APAC stocks gained heading into month-end as participants digested a slew of data releases and the BoJ policy decision. ASX 200 was led by strength in energy and tech, while domestic yields were pressured after mostly softer inflation data. Nikkei 225 declined heading into the BoJ policy decision after rate hike bets were boosted following several local press reports that the central bank is to consider a 15bps rate increase and although the hike materialised, the Bank's taper plan was less aggressive than many had called for. Hang Seng and Shanghai Comp. gained as participants digested the latest Chinese PMI data in which headline Manufacturing PMI topped forecasts despite remaining in contraction territory, while Non-Manufacturing PMI matched estimates.

Samsung Electronics (005380 KS) - Q2 (KRW) net 9.8tln (exp. 8.3tln), oper. profit 10.4tln (prelim. 10.4tln), rev. 74tln (prelim. 74tln). Q2 chip business operating profit KRW 6.45tln. Q2 display business operating profit KRW 1.01tln. Expects server memory product demand to remain strong in H2 due to AI. Q2 mobile business operating profit KRW 2.72tln (not 3.04 KRW tln). Expects supply of conventional DRAM, and NAND products to be limited due to HBM, server DRAM production, and sales increase. In H2, it plans to actively respond to the demand for high-value-added products for AI and will expand its capacity to increase the portion of HBM3E sales. In H2, plans to increase NAND sales by strengthening the supply of triple-level cell SSDs, which are still a majority portion of AI demand. In Q2, due to higher orders for sub-5nm technology, the number of AI and high-performance computing customers increased twofold from a year earlier. In Q2, overall market demand for smartphones declined sequentially, particularly in the premium segment. In Q2, mobile profitability declined slightly compared to the previous quarter, primarily due to increased costs stemming from the rising prices of essential components. In the second half of 2024, overall demand for smartphones is expected to increase year-on-year, with increased demand for premium products being driven by growing demand for AI. Q2 capex KRW 12.1tln. Q2 chip capex KRW 9.9tln. (Newswires) Shares rose 3% in South Korea.

EUROPEAN CLOSES

CLOSES: DAX: +0.56% at 18,424, FTSE 100: -0.22% at 8,274, CAC 40: +0.42% at 7,475, Euro Stoxx 50: +0.53% at 4,841, AEX: +0.43% at 908, IBEX 35: +0.76% at 11,203, FTSE MIB: +0.79% at 33,908, SMI: +0.52% at 12,278, PSI: -0.89% at 6,639.

SECTORS: Financials 1.05%, Industrials 0.91%, Consumer Disc 0.32%, Healthcare 0.29%, Materials 0.12%, Telecoms 0.12%, Utilities 0.03%, IT -0.05%, Consumer Stpl -0.08%, Energy -0.11%

FTSE 100

GSK (GSK LN) - Co. presented new data at an Alzheimer's conference; the study observed a statistically significant association between Shingrix vaccination and reduction of dementia risk vs Zostavas and Pneuomax 23. (Newswires)

HSBC (HSBA LN) - Q2 (USD): Pretax profit 8.9bln (exp. 7.78bln). Net Interest Income 8.26bln (exp. 8.89bln). H1 Pretax Profit 21.56bln (exp. 21.66bln). H1 Net Income 16.81bln (exp. 18.26bln). Co. announced a USD 3bln share buyback. Board approved an interim dividend of USD 0.10/shr. (Newswires)

Just Eat Takeaway (JET LN) - H1 (EUR): Revenue 2.570bln (exp. 2.549bln). Adj. EBITDA 203mln (exp. 208mln). Co. announced a EUR 150mln share buyback. Guidance for 2024 reiterated. (Newswires)

Rio Tinto (RIO LN) - H1 (USD) underlying earnings rose 15% Y/Y to 5.8bln (exp. 5.8bln), consolidated rev. 26.8bln, declares interim ordinary dividend of USD 1.77/shr (exp. 1.81). (Newswires)

OTHER UK COMPANIES

BROKER MOVES

DAX

OTHER GERMAN COMPANIES

Deutsche Lufthansa (LHA GY) - Deutsche Lufthansa (LHA GY) - Q2 (EUR): Revenue 10.007bln (exp. 9.936bln). Net Income 469mln (exp. 467mln). EBIT 659mln (exp. 669mln). EPS 0.39 (0.45). Co. said it will embark on a cost savings programme. (Newswires)

BROKER MOVES

CAC

Airbus (AIR FP) - Q2 24 (EUR): Adj. EBIT 814mln (exp. 670mln). Revenue 15.995bln (exp. 15.82bln). Net income 230mln (exp. 566mln). Guidance: On widebody aircraft, Co. continues to target a monthly production rate of 4 A330s in 2024 and a rate 12 for A350s in 2028. Around 770 commercial aircraft deliveries in 2024. FY24 Adj. EBIT of around EUR 5.5bln. FCF before customer financing of around EUR 3.5bln. Co. said it faced UK criminal probe into potential export control violations involving several Airbus entities in the UK. Separately, CEO said it is studying all options in space, including M&A; confirms new cost reduction programme in commercial division. (Newswires) Shares seen opening +2%

Casino (CO FP) - H1 (EUR): Revenue 4.2bln, adj. EBITDA 255mln, Consolidated net profit 39mln, Net financial debt EUR 1bln. (Newswires)

L'Oreal (OR FP) - H1 2024 (EUR): Operating profit 4.60bln (exp. 4.56bln), Operating margin 20.8% (exp. 20.7%), Adj. EPS 6.98 (exp. 7.07, Like-for-like sales +7.3% (exp. +7.64%). Q2 2024: LIKE-FOR-LIKE SALES: Like-for-like sales +5.3% (exp. +6.02%). Professional products +0.9% (exp. +1.33%). Consumer products +6.7% (exp. +7.66%). L'Oreal Luxe +2.8% (exp. +2.66%). Dermatological beauty +10.8% (exp. +17.4%). COMP SALES: North America +3.4% (exp. +3.48%). North Asia -2.4% (exp. -0.62%). Europe +9.7% (exp. +8.46%). South Asia Pacific, Middle East, North Africa, Sub-Saharan Africa +14% (exp. +14.4%). Latin America +12.3% (exp. +15.8%). SALES: Sales 10.88bln (exp. 10.77bln). Professional products 1.18bln (exp. 1.16bln). Consumer products 4.15bln (exp. 4.06bln). L'Oreal Luxe 3.77bln (exp. 3.72bln). Dermatological beauty 1.78bln (exp. 1.84bln). (Newswires)

Safran (SAF FP) - H1 (EUR): Revenue 13.05bln (exp. 12.819bln). Operating Income 1.97bln (Co. exp. 1.84bln). Cash Flow 1.46bln (exp. 1.40bln). Co. cuts guidance for Leap Engine deliveries growth and Civil Aftermarket revenue. The guidance cut due to parts supply. Co. reiterated guidance for 2024 revenue, recurring operating income, and FCF. (Newswires)

OTHER FRENCH COMPANIES

Klepierre (LI FP) - H1 Net Current Cash Flow per share EUR 1.25 (+3.3% Y/Y). EBITDA +5.4% Y/Y. Co. upgrades FY guidance. (Newswires)

BROKER MOVES

Euronext (ENX FP) downgraded to Sell from Neutral at Goldman Sachs

PAN EUROPE

BBVA (BBVA SM) - Q2 (EUR): Net 2.79bln (exp. 2.39bln), NII 6.48bln (exp. 6.416bln); expects to surpass goals set for 2021-2024 period. (Newswires)

Chip Names - AMD (AMD) shares surged 7.6% after hours after earnings topped expectations boosted by AI. Elsewhere, Samsung Electronics (005930 KS) shares rose 3% following its metrics. Separately, US intends to unveil a new rule in August which would expand the US' powers to prevent the foreign exports of Chipmaking equipment from China, via Reuters citing sources; would exempt exports from Cos in key US allies i.e. Japan, Netherlands & S. Korea. Would bar around 6 Chinese fabs at the centre of the nations' chip industry from receiving chipmaking equipment from many nations. Intends to add around 120 Chinese entities to the trade list, incl. chip fabs, toolmakers & EDA software providers. Rule is in draft form, and as such could change; aim is for publication in some form in the next month. (Reuters)

Cloud/Tech Names - Microsoft (MSFT) shares fell 2.8% after hours after cloud revenue missed expectations.

Leonardo (LDO IM) - Co. is in ongoing talks with peers at EU level over organisation and governance of its new space division. Discussing in very constructive way with Thales (HO FP) and Airbus (AIR FP) about possible alliances and synergies for stronger EU in space industry. In negotiations with Boeing (BA) over slowdown of 787 production, and sees positive prospects for B787 in long-term.(Newswires)

OMV (OMV AV) - Q2 (EUR): Revenue 8.584bln (exp. 9.222bln). EPS 1.51 (exp. 1.62). Operating Results 1.232bln (exp. 1.287bln). Net Income 494mln (exp. 541mln). (Newswires)

Stellantis (STLAM IM/STLAP FP) - Co. is offering a new round of voluntary buyouts to its US salaried workers. (Newswires)

BROKER MOVES

SMI

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

BROKER MOVES

US

CLOSES: SPX -0.50% at 5,436, NDX -1.40% at 18,796, DJIA +0.50% at 40,743, RUT +0.40% 2,243

SECTORS: Technology -2.20%, Consumer Staples -0.66%, Consumer Discretionary -0.55%, Materials -0.36%, Health +0.11%, Communication Services +0.16%, Industrials +0.27%, Utilities +0.55%, Real Estate +0.76%, Financials +1.19%, Energy +1.54%.

AMD (AMD) - Q2 2024 (USD): Adj. EPS 0.69 (exp. 0.68), Revenue 5.84bln (exp. 5.72bln). Data centre revenue USD 2.83bln (exp. 2.75bln). Gaming revenue USD 648mln (exp. 646.8mln). Client revenue USD 1.49bln (exp. 1.45bln). Embedded revenue USD 861mln (exp. 850mln). Adj. gross margin 53% (exp. 53%). Capital expenditure USD 154mln (exp. 127.1mln). Forecasts Q3 rev. USD 6.4bln-7.0bln (exp. 6.62bln). Forecasts Q3 gross margin view 53.5% (exp. 53.85%) Co. said supply for AI chips will remain tight through 2025. Executive expects more than USD 4.5bln in 2024 revenue from AI chips which is up from previous forecast of USD 4.0bln. AI chip revenue exceeded USD 1bln in Q2 for the first time. (Newswires) Shares rose 7.6% after hours.

Electronic Arts Inc (EA) - Q1 2025 (USD): EPS 1.04 (exp. 0.43), Revenue 1.66bln (exp. 1.63bln). Live Services and Other revenue 1.41bln (exp. 1.33bln). Full game revenue 250mln (exp. 294.8mln). R&D expenses 629mln (exp. 590.3mln). Q2 GUIDANCE: Net bookings 1.95-2.05bln (exp. 1.95bln). FY25 GUIDANCE: Still sees net bookings 7.3-7.7bln (exp. 7.49bln). Still sees operating cash flow 2.05-2.25bln (exp. 2.08bln). (EA IR) Shares were flat after hours.

Intel (INTC) - Co. is to cut thousands of jobs to reduce costs and fund a turnaround, according to Bloomberg. (Newswires)

Microsoft Corp (MSFT) - Q4 2024 (USD): EPS 2.95 (exp. 2.93), Revenue 64.73bln (exp. 64.39bln). REVENUE BREAKDOWN: Intelligent Cloud 28.52bln (exp. 28.72bln). Productivity and Business Processes 20.32bln (exp. 20.21bln). More Personal Computing 15.90bln (exp. 15.54bln). KEY METRICS: Operating income 27.93bln (exp. 27.63bln). CapEx 13.87bln (exp. 13.27bln). Revenue at constant currency +16% (exp. +14.7%). (Microsoft IR) CEO said they have over 60,000 Azure AI customers, up nearly 60% Y/Y and over 77,000 customers have adopted GitHub Copilot which is up 180% Y/Y, adds GitHub Copilot has USD 2bln annual run-rate .Microsoft AI contributed 8pts to Azure revenue growth vs. 1pts Q/Q. (Newswires) Shares fell 2.8% after hours.

Mondelez International Inc (MDLZ)- Q2 2024 (USD): Adj. EPS 0.86 (exp. 0.79), Revenue 8.34bln (exp. 8.45bln). FY GUIDANCE: Organic net revenues high end +3-5% (exp. +2%). Adj. EPS +high-single (exp. +9.1%). FCF 3.5bln+. Executive expects a market correction in costs of cocoa to a more sustainable price. (MDLZ IR/Newswires)

Starbucks Corp (SBUX) - Q3 2024 (USD): Adj. EPS 0.93 (exp. 0.93), Revenue 9.11bln (exp. 9.24bln). Q3 China comp. store sales fell 14%. Q3 US comp. store sales fell 2%. (businesswire)

31 Jul 2024 - 06:53- Research Sheet- Source: Newsquawk