Must read: US tech crash, Unilever, ITV, AstraZeneca, BT

GLOBAL MARKETS 

The FTSE 100 has been caught up in a global market sell-off, with a sea of red across European equities today. It comes after the Nikkei shed more than 3% in Japan after negative momentum from declines on Wall Street grabbed hold of global indices. 

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US markets suffered their worst single session since 2022, with the tech-heavy Nasdaq shedding 3.6%. This was driven by Tesla Inc (NASDAQ:TSLA), NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL), highlighting how the wider US market has become extremely vulnerable to the fate of a small handful of tech giants.

UNILEVER 

Unilever (LSE:ULVR) reported a 3.9% rise in second-quarter sales, missing analysts’ expectations for growth of 4.2%. Spending on consumer goods was tempered by cost-of-living pressures amid the backdrop of higher interest rates and a period of rising prices. 

However, it kept its full-year guidance unchanged for organic sales growth of 3-5%. Plus its Power Brands enjoyed strong underlying sales growth of 5.7% and it announced plans to increase its quarterly dividend for Q2 by 3%, the first increase since Q4 2020 in an encouraging sign for its shareholders.

Also on a positive note, CEO Hein Schumacher said volume growth has been improving, in a positive indication that the brand is no longer forced to rely on raising prices to flatter revenue. With inflationary pressures now easing, consumers are increasingly able to switch back to more expensive branded products rather than supermarket, cheaper own-label rival options. That plays well into the hands of Unilever which sells branded products from the likes of Dove, Hellmann’s and Domestos to name a few. 

Schumacher has been taking major steps to revamp the business as part of a shake-up which has included job cuts to reduce the company’s cost burden and a reduced focus on environmental targets. He is also looking to spin off its ice cream business next year to raise around 7 billion euros and streamline the business. 

Shares in Unilever have enjoyed a strong performance so far this year, up over 20%, outperforming the UK market and the stock is extending gains today.

ITV 

ITV (LSE:ITV) reported a 3% drop in first-half total revenue and guided for full-year revenue to be in the low single digits, sending shares lower. ITV has been negatively impacted by the 2023 US writers’ and actors’ strike and at ITV Studios the company said there had been ‘lower demand from free-to-air broadcasters in Europe in the short term’. 

On a more positive note, ITV reported a 10% jump in first half advertising revenue and digital revenues jumped by 17%, thanks to a boost to its ITVX streaming platform from the Euros football championships. CEO Carolyn McCall said the ad market is ‘very firm’. Plus first half earnings jumped 40% with adjusted EBITDA hitting £213 million. However this was not enough to persuade traders and shareholders with the stock shedding around 5.5% today.  

ITV has been looking to improve the business via a cost and efficiency program which has included job cuts. McCall said the company is on track to deliver £40 million of savings in 2024. 

Despite today’s drop, shares in ITV have enjoyed a strong 2024 so far, rallying over 25%, partly thanks to a boost in February after a hedge fund Silchester International acquired a major stake in the business.

ASTRAZENECA

Keith Bowman, Equity Analyst, interactive investor says, “AstraZeneca (LSE:AZN) has today detailed robust results, with the drugs giant again upping its full-year estimates for both revenues and core earnings. 

Currency adjusted revenues for the second quarter rose 17% to $12.93 billion, driven by double-digit percentage growth for core drug arenas Respiratory & Immunology and Oncology or cancer treatments. As such, full-year revenues and core earnings are now expected to produce mid-teens percentage growth, up from a previous low-teens growth. A $0.07 increase in the dividend sees the interim payment rise to $1.00 from last year’s $0.93 per share. 

In all, drug development remains an expensive business. Sales of Covid related products continue to fall. Acquisitions such as its recent $1.05 billion purchase of rare endocrine disease specialist Amolyt Pharma are also not without risk, while GSK (LSE:GSK) shares currently sit on an estimated future dividend yield of around 4% compared with Astra’s 2%.

To the upside, cancer treatment sales remain buoyant, generating just over two-fifths of overall revenues in this latest quarter. Drug development, such as that for potential obesity treatments, is ongoing. Sales on a geographical basis are diverse including growing sales in China and the emerging markets, while takeovers such as its 2021 purchase of rare disease focused Alexion have expanded its diversity of drug treatments.

For now, and with AstraZeneca holding ambition to grow annual revenues to $80 billion by 2030 from $45.8 billion in 2023, City consensus opinion continues to point towards a buy.”

BT

Lee Wild, Head of Editorial, interactive investor says, “A sharp focus on costs has been significant to this set of quarterly numbers from BT Group (LSE:BT.A), contributing to growth in profit and offsetting weaker revenues at both the consumer and business units. 

We’re only three months into the financial year, but chief executive Allison Kirkby says the company remains on track to hit targets for the full year. 

Consumer, Business and Openreach divisions all look pretty much in line with expectations at the revenue level, which dropped 2% to £5.05 billion. However, a 6% jump in profit at Openreach to £1.02 billion offset the predicted 2% declines at both Consumer and Business. Price hikes and growth of fibre to the premises (FTTP) made it possible. It meant an increase in quarterly group profit of 1% to £2.03 billion compared with a decline pencilled in by some analysts. 

BT shares soared by as much as a third during the run up to and publication of annual results in May. Just a few months in the hot seat, rather than reset expectations, Kirkby stuck to the existing strategy and provided guidance that was much better than City consensus. Even after the rally, a dividend yield near 6% makes BT one of the FTSE 100’s most generous dividend payers."