Latest news with #profit margins
Yahoo
15 hours ago
- Business
- Yahoo
Goldman Sachs Flags Risk: S&P's Q2 Beat Masks Stretched 2026 Margins
Aug 18 - S&P 500 companies posted stronger-than-expected second-quarter earnings, but Goldman Sachs (NYSE:GS) urges caution on profit margins for 2026. David Kostin, Goldman's chief U.S. equity strategist, says S&P 500 EPS rose 11% year over year, still above consensus, as analysts cut estimates earlier. Roughly 60% of reporters topped forecasts, reflecting a low bar heading into the season. Guidance turned more positive: 58% of firms raised their 2025 outlook, double the rate from the first quarter, and analysts lifted EPS forecasts through late 2025 and into 2026. Still, Kostin warns the dramatic expansion baked into margin projections for next year looks unrealistic even if companies offset higher costs. A weaker dollar helped nominal sales for large caps, while on a constant-currency basis real sales slowed across market caps and contracted for mid- and small-caps. The mega-cap tech subgroup, led by the Magnificent Seven, posted standout growth, with that cohort's EPS up 26%. Nvidia (NASDAQ:NVDA) remains a focal point; Wall Street has already boosted 2026 capex estimates. Goldman expects analyst revisions to drift toward long-term trends rather than the sharp uplift priced into some forecasts. This article first appeared on GuruFocus.
Telegraph
2 days ago
- Business
- Telegraph
Britain's chemical sector at ‘very high risk', claims credit insurer
Britain's entire chemical sector has been branded 'very high risk' by a leading credit insurer after soaring energy costs triggered a wave of collapses. Coface, a leading global credit insurer, said high energy costs were hammering companies' profit margins and leaving them struggling to pay bills and repair vital equipment. Jonathan Steenberg, Coface's UK economist, said: 'We're seeing slow payments in certain sectors and insolvencies are about 60pc higher than they were before the pandemic. 'To a large degree, energy costs have been the root of this quicker deterioration. It has both first and second order effect, obviously starting with the increase in energy prices, which is also pushing up labour and other costs. It means we have taken the decision to move the chemicals sector up to a very high risk.' Coface specialises in insuring companies against non-payment when selling goods, especially across borders, and in commercial debt collection. The need to assess risk means it also analyses the potential for payment defaults across various industries. Mr Steenberg said it was still offering credit insurance to chemical companies. Britain's chemicals sector employs around 138,000 people directly across 5,000 companies, and supports another 360,000 indirect jobs with exports totalling £61bn. It is also a crucial supplier to other industries, providing the raw materials from which many final products are created. Last week the industry was dealt another major blow after the UK's largest bioethanol plant said it would close following Sir Keir Starmer's trade deal with the Donald Trump. Vivergo Fuels, near Hull, warned that the deal, which meant a 19pc tariff on bioethanol imports from the US to the UK was removed, would make its factory uneconomic because it faced much higher energy costs than US competitors. On Friday the Government said it had 'taken the difficult decision not to offer direct funding as it would not provide value for the taxpayer'. Other plants could follow – all linked to energy bills that now typically comprise more than 50pc of their total costs. Bosses at Sir Jim Ratcliffe's Ineos petrochemicals plant in Grangemouth, Falkirk, said last week it had not made a profit for five years because of the taxes and levies imposed on the gas it consumes both for energy and as a feedstock for making plastics. CF Industries has also ceased ammonia and fertiliser production at its plant in Ince, Cheshire, in 2021 and then at its plant in Billingham, Teesside, in 2023. Steve Elliott, the chief executive of the Chemical Industries Association, said the high cost of industrial energy was because of government policy rather than global markets. He said: 'The Government has put multiple levies on power and gas prices while also rejecting supplies from the North Sea and from fracking. It means energy has become a huge proportion of overall costs and makes it difficult to remain competitive.' Andrew Griffith, the shadow business secretary, said: 'The UK chemicals sector is foundational to much other manufacturing but is being crippled by high energy costs and penal carbon taxes. It's bonkers policy as when British firms die, the same chemicals are simply imported from overseas.' In June, the Office for National Statistics (ONS) published a report on the impacts of high energy prices, describing how, between 2021 and 2024, industrial electricity costs rose 75 pc and gas prices by 108pc. 'Collectively, the volume of output in [heavy] industries has fallen by one third since the start of 2021, and is now at its lowest level since the start of the available time series in 1990,' the ONS said. Mr Steenberg said: 'When it comes to chemicals the main inputs are energy, specifically gas. If you're not competitive in that, there's no reason to have an industry.' A Government spokesman said: 'We inherited a difficult economic situation, with businesses facing some of the highest industrial energy prices in Europe. That's why we have announced measures to support sectors across the UK as part of our Plan for Change, ensuring that decarbonisation doesn't mean deindustrialisation.'
Yahoo
08-08-2025
- Business
- Yahoo
Profit margins for Irish supermarkets not 'notably high', says CCPC
A report from Ireland's Competition and Consumer Protection Commission (CCPC) indicates that profit margins for the Irish supermarkets do not appear to be 'notably high'. The report showed that for the year to February 2024, Tesco Ireland's operating profit margin decreased to 3.7% from 4% the previous year. Musgrave's profit margin also declined to 2.4% in 2023, a slight drop from 2.5%, while Aldi saw its profit margin reduce to 0.8% in 2023, down from 0.9% in 2022. In the update to 2023's high-level analysis of the Irish grocery retail sector, the consumer watchdog has stated that Irish supermarkets' profit margins are in line with those seen in the UK and other European regions. The CCPC's review encompassed an examination of market concentration, trends in grocery pricing both nationally and internationally, and broader issues pertinent to the sector that are within its scope. The findings from its analysis also revealed no evidence to suggest that competition within the Irish grocery retail sector is not working. It also notes that enhanced competition since 2005 has yielded significant advantages for consumers. Food price hikes in Ireland have remained substantially below the European average, aligning with a period of intensified market competition in Ireland. The CCPC stated: 'While food prices in Ireland remained high internationally, food inflation during the period analysed had been the lowest in the EU [European Union]'. The analysis indicates a considerable rise in grocery prices starting from 2021, with Irish consumers facing a 27% surge in prices by June 2025. The report continued: 'Ireland has experienced significant cumulative price increases since 2019 in import prices, agricultural commodity prices and producer prices, but retail prices have increased at a much slower pace. 'This may indicate that retailers are absorbing some of the cost pressures rather than passing them fully on to Irish consumers. "While the CCPC has not seen evidence to justify an in-depth study of the grocery retail sector, it remains a key market for the CCPC, which we will continue to review.' "Profit margins for Irish supermarkets not 'notably high', says CCPC" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Irish Times
07-08-2025
- Business
- Irish Times
Supermarket profit margins ‘not notably high' despite rising prices, watchdog says
Supermarket profit margins in Ireland are 'not notably high', the consumer protection watchdog has said, despite figures showing grocery prices are currently rising at nearly three times the general rate of inflation. A new report on the grocery sector by the Competition and Consumer Protection Commission (CCPC) also says retailers are absorbing some of the cost pressures rather than passing them fully on to Irish consumers in contrast to the experience elsewhere in the European Union. The report showed Tesco Ireland's profit margin for the year to February was 3.7 per cent, down from 4 per cent; Musgrave 's profit margin in 2023 was 2.4 per cent, down from 2.5 per cent; while Aldi 's was 0.8 per cent in 2023, down from 0.9 per cent. 'Thus, all three groups have reported declining profitability, albeit marginal, in their latest financial results,' the watchdog said. READ MORE Dunnes and Lidl do not publish accounts for their Irish operations, but Lidl's UK accounts, which combine UK and Irish activities, show a profit margin of 2.1 per cent in its latest financial year. The CCPC said profit margins for Irish supermarkets 'align closely' with those observed in the UK and other parts of Europe. For instance, both Sainsbury's and Asda reported profit margins of approximately 3 per cent for the 2023/24 period. In Denmark, the Salling Group achieved a margin of 3.7 per cent in 2024, while the largest supermarket chain in the Netherlands reported a margin of 4 per cent. The CCPC also said supermarket margins are 'notably lower' than those of some producers within the market. For example, Unilever reported a margin of 18.4 per cent in 2024, up from 16.7 per cent in 2023. Similarly, Kerry Group maintained a margin of 11.2 per cent in 2024, a slight decrease from 11.3 per cent in 2023. Glanbia also showed strong performance with a margin of 14.4 per cent in 2024, up from 13.6 per cent the previous year. The CCPC noted Irish consumers are experiencing a 'sharp increase' in grocery prices, but said Ireland's rate of grocery price inflation has been below the EU average for 15 of the past 16 years. It acknowledged Irish consumers have experienced a 27 per cent increase in prices since 2021, but said this remains below the EU average where grocery prices have increased by 35 per cent over the same period. Just four EU member states have experienced smaller price increases since 2021, it noted. The watchdog said grocery inflation in Ireland has 'mostly been lower' than the EU in recent years, with EU and Irish inflation rates in close alignment since 2024. Data from the CSO shows Irish grocery prices were 14 per cent higher than the EU average in 2024. This gap has reduced since 2003 when Irish prices were 30 per cent higher. The CCPC said higher prices here must be considered within the context of structural factors within the Irish economy such as higher wages, remote geographic location, and higher costs in sectors such as construction, legal services and insurance. 'Overall, the high-level inflation figures do not suggest any significant market problems in the Irish grocery retail sector,' it said. 'If anything, the evidence suggests that Irish consumers have experienced significant price benefits compared to European counterparts.' The report said Ireland has experienced 'significant cumulative price increases' since 2019 in import prices, agricultural commodity prices and producer prices, but noted that retail prices have increased at a much slower pace. 'This may indicate that retailers are absorbing some of the cost pressures rather than passing them fully on to Irish consumers,' the watchdog said. 'This pattern is not reflected in the EU where increases in the retail price of food have tended to more closely follow agricultural and producer prices.'
Bloomberg
17-07-2025
- Business
- Bloomberg
ABB Posts Strong Order Growth on Rising Demand From US
ABB Ltd. reported better-than-expected order growth and profit margins in the second quarter, as its business selling factory automation tools was lifted by a large order. Second-quarter orders rose 16% to $9.79 billion, the Zurich-based industrial firm said Thursday in a statement, above the $8.93 billion average estimate of analysts polled by Bloomberg. The margin on earnings before interest, taxes and amortization came in at 19.2%, versus the 18.8% estimate.
