European shares tick higher after Friday selloff; Swiss stocks slump
The pan-European STOXX 600 index (.STOXX), opens new tab rose 0.2% by 0720 GMT, after logging its biggest daily drop in more than three months on Friday. Switzerland's benchmark SMI index (.SSMI), opens new tab fell 1.5% as trading resumed after a long weekend.
Switzerland could revise its offer to the United States after being hit by a staggering levy late last week that experts warned could trigger a recession, Business Minister Guy Parmelin said.
Swiss pharma stocks Novartis (NOVN.S), opens new tab and Roche (ROG.S), opens new tab slipped 1.3% and 2.3%, respectively, after U.S. President Donald Trump sent letters to the leaders of 17 major pharmaceutical companies directing them to slash U.S. prescription drug prices.
Swiss luxury companies Richemont (CFR.S), opens new tab and Swatch (UHR.S), opens new tab, among the most exposed to tariffs, fell more than 1.5% each.
UBS (UBSG.S), opens new tab slipped 2.5% after the bank said it would pay $300 million to resolve U.S. mortgage securities cases related to misselling of mortage-linked investments.
Lloyds (LLOY.L), opens new tab was a bright spot, gaining 6.3% to the top of the Stoxx 600 index after the UK's Supreme Court overturned a ruling on motor finance commissions in positive news for banks.
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Times
21 minutes ago
- Times
Is this a good time to buy shares in Diageo?
The latest annual results from Diageo give every impression of papering over the cracks, reporting flat sales and lower profits, having lost a chief executive. Nik Jhangiani, the interim chief executive, produced as much positive spin as he could, even on the supercharged $625 million cost-saving programme, but could not disguise a 'challenging' environment led by rapidly changing tastes that, in the US at least, extends to competition from cannabis drinks. Operating profits fell 27.8 per cent to $4.3 billion, but before $1.4 billion of exceptional items the reduction was trimmed to 0.7 per cent, giving a healthy 21.4 per cent profit margin. The main exceptional was the sale of the US-based Ciroc subsidiary. Net profit was 39.1 per cent lower at $2.5 billion, translated into a similar-sized drop in earnings per share to 105.9 cents. That has just about let Jhangiani pay a 62.98 cents final dividend to maintain the annual payout at 103.48 cents. The stock market's reaction was to mark the shares up 89p to £19.04, suggesting investors were expecting worse. We will not have a clear picture of where the group is heading until the board confirms Jhangiani in the top job or hands it to someone else, probably in October. Whoever it is will have to do something drastic to halt Diageo shares' steady three-year decline. As Jhangiani said: 'We have a lot to do.' The stop-gap plan is to cut costs even more, promote the group's current winning brands — Guinness stout, Don Julio tequila, Johnnie Walker scotch and the blackberry-infused Canadian whisky Crown Royal — and move as quickly as possible to catch the surprisingly rapid transition to low-alcohol drinks. While no one brand can on its own put a rocket under annual sales of $20.2 billion, Jhangiani dropped hints yesterday that his researchers are stretching every sinew to come up with an alcohol- and calorie-light successor to longstanding hits such as Baileys Irish Cream. They have taken 40 per cent of the calories out of that with Baileys Deliciously Light, but so far have been unable to do without the alcohol. Meanwhile, Jhangiani is desperately trying to get his head around the unpredictable leisure habits of Gen Z, who are influenced by health considerations, other claims on their wallets and less compulsion to hit the bars on a night out. 'We need to make sure our offerings are tailored to social occasions,' he said. A lot of that boils down to moderation, the catch-all management term for no and low alcohol. While Guinness 0.0 has become a banker brand, the picture is fuzzy elsewhere. Price resistance is turning into shrinkflation with smaller spirits bottles in Asian supermarkets. And that is also influencing the alcohol content of ready-made cocktails. Overhanging the price question is President Trump's tariff campaign, which is due to add 10 per cent to UK exports to the US and 15 per cent on dispatches from Europe. Diageo reckons this could cost it $200 million a year at the operating profit level, mainly affecting the group's lucrative spirits brands. However, Jhangiani hopes to be able to offset as much as half of that with clever pricing. The Scotch Whisky Association buttonholed Trump on his recent Scottish visit to point out that if production were moved to the US, the product would no longer qualify as scotch. While gin, vodka and other spirits are a different matter, it will take years and plenty of capital to build distilleries in the US. However, Diageo has made a start with a factory in Alabama. Demand in the US and China is expected to be weaker for some time, and Europe is fragmenting. The group's former southern Europe sales force is being broken up into separate Spanish, French and Italian units to cater for different tastes. That adds to the costs that Jhangiani is trying to squeeze, while protesting that this need not mean job cuts. 'We want more feet on the street,' he said. Despite Monday's positive stock market response, in the face of strong headwinds for the next few years the company does not yet have a workable recipe to take the shares back up to anywhere near their 2022 level. Maybe it will have to turn into a full-blown soft drinks company. Advice AvoidWhy Future unclear until the CEO issue is sorted out
The Independent
38 minutes ago
- The Independent
NFL and ESPN reach nonbinding agreement for sale of NFL Network and other media assets
Ever since the NFL announced it was looking to sell NFL Network and other media assets, ESPN had been seen as one of the favorites to make a deal. Nearly five years later, a framework is finally in place. The NFL announced Tuesday night that it has entered into a nonbinding agreement with ESPN. Under the terms, ESPN will acquire NFL Network, NFL Fantasy and the rights to distribute the RedZone channel to cable and satellite operators and the league will get a 10% equity stake in ESPN. The league and ESPN still have to negotiate a final agreement and get approval from NFL owners. The agreement will also have to undergo regulatory approvals. 'Sometimes great things take a long time to get to the point where it's right. And we both feel that it is at this stage,' NFL Commissioner Roger Goodell said in a call with The Associated Press. Along with the sale of NFL Network, the NFL and ESPN will have a second nonbinding agreement where the NFL will license to ESPN certain NFL content and other intellectual property that can be used by NFL Network and other assets that have been purchased. 'We have been talking about it in earnest for the last few years. But interestingly enough, we started talking about this over a decade ago but nothing really ended up happening. And we got back at it when I came back to Disney after my retirement,' Disney CEO Bob Iger said in a call with the AP. What ESPN gets ESPN is expected to launch its direct-to-consumer service before the end of September. The service would give cord-cutters access to all ESPN programs and networks for $29.99 per month. The addition of more NFL programming increases the value. Many viewers will receive the service for free as part of their subscription to cable, satellite and most streaming services. 'When I came back to Disney and assessed essentially the future of ESPN, it became clear that ESPN had to launch a bigger and more robust and digital or direct-to-consumer product, not only for the sake of ESPN's business, but for the sports fan,' Iger said. "And obviously, when you start thinking about high-quality sports content, your eyes immediately head in the direction of the NFL because there's really nothing more valuable and more popular than that. NFL Network — which has nearly 50 million subscribers — would be owned and operated by ESPN and would be included in ESPN's direct-to-consumer product. The NFL RedZone channel would be distributed by ESPN to cable and satellite operators. However, the NFL will continue to own, operate and produce the channel as well as retain the rights to distribute the channel digitally. ESPN would also get rights to the RedZone brand, meaning RedZone channels for college football and basketball or other sports could be coming in the future. NFL Fantasy Football would merge with ESPN Fantasy Football, giving ESPN the official fantasy football game of the league. NFL Network will still air seven games per season. Four of ESPN's games, including some that are in overlapping windows on Monday nights, would move to NFL Network. ESPN will license three additional games that will be carried on NFL Network. What the NFL receives (and retains) The league gets a 10% equity stake in ESPN. Aidan O'Connor, a senior vice president at the Prosek Partners marketing firm, estimates the value of that would be $2.2 billion to $2.5 billion. ESPN is currently 80% owned by ABC Inc. as an indirect subsidiary of The Walt Disney Company. The other 20% is owned by Hearst. There isn't any word yet on whether the 10% stake for the NFL would all come from ABC's stake or whether it would be 5% each from ABC and Hearst. This isn't the first time the league has had an equity stake in a digital or communications business. It had that in the past with Sirius Satellite Radio and SportsLine. The NFL could also have equity in the newly formed 'Paramount Skydance Corporation,' which owns CBS, due to the league's partnership with Skydance. 'This is new as far as a partner now operating a business that we built, ran and grew," said Hans Schroeder, the NFL's executive vice president of media distribution. "It'll also be a little bit new again with some of the dynamics here, but we'll continue to balance that in a really arm's length way where we'll think about how we manage and work across to all our partners.' The league will continue to own and operate NFL Films, NFL+, the official websites of the 32 teams, the NFL Podcast Network and the NFL FAST Channel (a free ad-supported streaming channel). 'The moves align with the NFL's longstanding ambition to reach $25 billion in annual revenue by 2027 — a target first set in 2010, when league revenue stood at approximately $8.5 billion,' O'Connor said. 'Financially, the move also signals to investors that ESPN is doubling down on differentiation and content stickiness by offering a scarce and premium product in a crowded marketplace. Intentionally ceding equity to the NFL transforms ESPN from a media licensee into a true platform partner — with few properties rivaling the league in terms of cultural significance, appointment viewing, audience reach, and monetization efficiency." No major changes yet Viewers will likely not see any immediate impacts until next year once everything is approved. Besides ESPN, the biggest winner in this could be NFL Network, which had seen reductions in original programming the past couple years. 'Total Access,' the network's flagship show since its launch in 2003, ended in May 2024 amid a series of layoffs and cost-cutting moves. 'Good Morning Football' also moved from New York, where it had been since its start in 2016, to Southern California last year. NFL Network moved to a broadcast facility across the street from SoFi Stadium in Inglewood, California, in 2021. 'The thing that's exciting for us is that we have put a lot into the network. I think it's been very effective for fans. We know it's in good hands,' Goodell said. 'They're innovative, they recognize great production and know how to produce it. They will do a fantastic job of operating the network and taking it to another level.' ___
Reuters
38 minutes ago
- Reuters
Rivian, Lucid warn of bumpy road ahead as policy changes hurt
Aug 5 (Reuters) - Rivian (RIVN.O), opens new tab and Lucid (LCID.O), opens new tab posted disappointing quarterly earnings on Tuesday and provided a grim outlook for the year as the electric vehicle makers take a hit from policy shifts and trade tensions that have disrupted the industry. Shares of Rivian fell about 4% after the bell, while Lucid shares dropped 7%. EV makers are navigating a bumpy road under U.S. President Donald Trump's administration, which has decided to take away consumer tax credits, impose high tariffs on imports of auto parts and remove emission fines for makers of gas vehicles. Add to that, China's curbs on the export of heavy rare earth metals - essential components for motors - have disrupted supply chains and affected production in the U.S. Rivian flagged higher costs in the June quarter, hit by disruptions to rare earth supply, and increased its adjusted core loss forecast for the year as income from the sale of regulatory credits dries up. Its cost of revenue for each vehicle produced rose about 8% to $118,375 per unit sold from a year earlier, according to Reuters calculations. "That's really reflecting a much lower production volume, which was largely driven because of challenges we had within our supply base as a result of a lot of the changes in policy," CEO RJ Scaringe told Reuters. "Therefore, our costs look higher, but it's not as if our bill of materials grew or as if we became operationally less efficient." Lower production in the June-quarter led to a $14,000 impact per vehicle sold to cost of good sold, CFO Claire McDonough said in a call with analysts. The company will shut down production for three weeks in September, after a one-week pause in the second quarter, to integrate components and prepare for the launch of its smaller and cheaper R2 SUV next year that is seen as crucial to its success. While Lucid said it managed to largely avoid the rare earth supply disruption by using some magnets from its inventory, its profit margin was hurt by tariff-related costs in the second quarter. The luxury EV maker cut its annual production forecast. The $7,500 federal EV tax credit expires at the end of September, eliminating a key competitive advantage that has driven demand, but analysts anticipate a surge in third-quarter sales as customers rush to make purchases before losing access to the incentive. "We're definitely expecting that there is some softening in demand (in the fourth quarter)," Lucid's interim CEO Marc Winterhoff told Reuters. The company has planned countermeasures to make it "palatable" for consumers, he said, without disclosing details. The elimination of penalties for automakers not meeting fuel economy standards by Trump's administration has drastically reduced demand for regulatory credits, which companies like Rivian and Lucid sell to traditional automakers to help them avoid emissions fines. Rivian largely blamed a tapering in the value of U.S. regulatory credits - expected to be about half of the $300 million it estimated - for the higher loss estimate and said it no longer expected revenue from such sales in the second half of the year. Rivian said it expected its adjusted core loss to be between $2 billion and $2.25 billion this year, compared with $1.7 billion to $1.9 billion previously forecast. Rivian anticipates gross profit this year to roughly break even. It earlier expected a modest profit. Rivian said on Tuesday it expected record deliveries in the third quarter across its consumer and commercial segments as demand is pulled forward. Apart from its SUVs and pickups, Rivian makes electric delivery vans for fleets, including which is its largest shareholder.
