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7NEWS
a day ago
- Business
- 7NEWS
Biotech giant CSL to cut 3000 jobs and spin-off vaccine arm as it cuts costs
Australian pharmaceutical giant CSL will cut as many as 3000 jobs and spin-off its flu vaccine arm into a separate business in a bid to shave $500 million from its bottom line. The biotechnology firm announced the shake-up at its annual financial results call on Tuesday, where its chief executive dismissed concerns about US tariffs, but warned about the impact of falling vaccination levels. The company, which is the third largest in Australia, also revealed its revenue rose by 5 per cent during the last financial year and its profit after tax grew by 14 per cent to $US3 billion ($A4.6 billion). Despite its rising profit, CSL chief executive Paul McKenzie told investors the global pharmaceutical market had become a volatile environment, and the company would need to adapt to meet its financial goals and simplify operations. Cost reductions would include cutting up to 15 per cent of its workforce worldwide over the next three years, and closing 22 US plasma centres over the next 12 months. 'We are pleased with this performance, but we know we must rapidly adapt to position ourselves well into the next decade in a constantly evolving operating environment,' Mr McKenzie said. 'We will target more than half a billion US dollars in savings by the end of fiscal year '28.' The company would also seek to 'de-merge' its flu vaccination arm, Seqirus, as part of the shake-up, to become a separate ASX-listed company chaired by former CSL Seqirus president Gordon Naylor. The move would come at a challenging time for flu vaccinations worldwide after low rates of take-up in some countries, Mr McKenzie said, but with signs that could improve. 'We view the softness in the US seasonal category as highly irrational based on the vaccine risk-reward profiles and the scale of disease burdens which this year reached a 15-year high,' he said. 'In the US... we are encouraged by the recent positive universal recommendation by (the Advisory Committee on Immunisation Practices), a clear sign that influenza is not going away and it still has severe impact on public health.' Potential pharmaceutical tariffs floated by US President Donald Trump were also unlikely to affect CSL, Mr McKenzie told investors, due to its operations in the US. Trump threatened to impose tariffs of up to 250 per cent on drug imports from Australia earlier this month, though has yet to confirm details or a timeline for the plan. Total revenue for CSL rose to $US15.5 billion during the 2025 financial year, and the company forecasts revenue to grow between four and five per cent over the 2026 financial year. The company will pay a final dividend of $US1.62 to shareholders, up by 12 per cent.
Perth Now
22-07-2025
- Business
- Perth Now
Wall Street opens mixed amid focus on trade talks
Traders on Wall Street have all but ruled out a cut in interest rates by the central bank next week. (AP PHOTO) Traders on Wall Street have all but ruled out a cut in interest rates by the central bank next week. (AP PHOTO) Credit: AAP Wall Street is struggling for direction as investors weigh signs of progress in US trade talks and peruse a spate of second-quarter company earnings, some of which showed a hit from President Donald Trump's tariff policies. In early trading on Tuesday, the Dow Jones Industrial Average rose 68.00 points, or 0.16 per cent, to 44,393.01, the S&P 500 gained 5.04 points, or 0.08 per cent, to 6,310.64, and the Nasdaq Composite lost 19.88 points, or 0.09 per cent, to 20,954.29. Tariffs have started to take a bite out of Wall Street giants. General Motors had its second-quarter profit skid 32 per cent to $US3 billion ($A4.6 billion), with the car maker blaming hefty tariff costs for carving out $US1.1 billion from its results. The company's shares lost 6.5 per cent while peer Ford also dipped 1.4 per cent. "Everyone's watching GM very closely and the numbers did disappoint, and specifically related to tariffs," said Mark Malek, chief investment officer at Muriel Siebert. "The fact that they (GM) did come out and say that there's going to be a forecast based on increases in tariffs is something that is going to play out throughout the day." RTX slashed its 2025 profit outlook after taking a direct hit from Trump's tariff war, sending its shares down 3.9 per cent. Lockheed Martin did not fare much better - its second-quarter profit nosedived nearly 80 per cent after booking a hefty $US1.6 billion pre-tax loss. Yet, despite the trade turbulence, the robust US economy has powered major indexes to fresh all-time highs. Treasury Secretary Scott Bessent is set to meet his Chinese counterpart next week, potentially discussing an extension to the August 12 deadline set for tariffs on China. With just over a week before the August 1 deadline for most US trading partners, Bessent stressed that the administration was focused on striking high-quality trade deals not just quick ones. Meanwhile, negotiations stalled with optimism for a breakthrough deal with India waning, according to Indian government officials, and as the European Union weighed new countermeasures against the US. Still, a slew of positive earnings surprises has kept markets near record territory. Analysts expect S&P 500 companies to report a healthy 6.7 per cent jump in second-quarter profits, with Big Tech leading the charge, data compiled by LSEG showed. Investors piled into tech titans on Monday, with Google-parent Alphabet powering Wall Street gains ahead of its results. The company is scheduled to kick off earnings for the "Magnificent Seven" megacaps along with Tesla on Wednesday. Tesla rose 0.1 per cent on Tuesday. The healthcare sector jumped 1.3 per cent to lead sectoral gains after falling for the last three sessions. Meanwhile, Philip Morris fell 7.5 per cent after reporting second-quarter revenue behind expectations while Coca-Cola slipped 1.0 per cent despite beating quarterly profit estimates. The stocks dragged the consumer sector to the bottom. After last week's mixed economic cues, traders have all but ruled out an interest-rate cut next week. They are pricing in a 58 per cent chance of a reduction in September, according to the CME's FedWatch tool. Advancing issues outnumbered decliners by a 2.21-to-1 ratio on the NYSE and by a 1.65-to-1 ratio on the Nasdaq. The S&P 500 posted seven new 52-week highs and no new lows while the Nasdaq Composite recorded 25 new highs and 22 new lows.
