21st Oct 2015 07:36
LONDON (Alliance News) - Shares in London opened lower Wednesday, but with ARM Holdings leading the gainers after saying it expects to meet market expectations for 2015 dollar revenue, as it reported a rise in pretax profit for the third quarter.
In the quarter to end-September the computer chip designer reported a pretax profit of GBP102.9 million, up from GBP79.2 million a year before, as revenue rose GBP243.1 million, up from GBP195.5 million.
This brings ARM's pretax profit for the first nine months of the year to GBP301.0 million, up from GBP225.1 million a year before, on revenue of GBP699.1 million, up from GBP569.3 million.
Revenue was driven by a strong performance from technology royalties, which offset weaker growth in licensing, ARM said. The company said it enters the final quarter of 2015 with "strong royalty momentum" and a "healthy licensing pipeline".
Shares in ARM were up 6.5%.
Meanwhile, shares in Smiths Group also were in favour, up 2.2%, after being upgraded to Buy from Hold by Citigroup.
Merlin Entertainments was up 2.0%. The theme park and attractions operator said it has set up a joint venture with China Media Capital to develop a LEGOLAND Park in Shanghai as well as various Midway attractions across China. Merlin said the attractions under the Midway brand to be rolled out may include The Dungeons, DreamWorks Tours and others.
Shares in Reckitt Benckiser added 2.0% after the company reported a fall in group net revenue in the third quarter of 2015, although it grew at constant exchange rates, leading the consumer goods company to raise its full-year revenue forecast on a constant currency basis.
In the first nine months of the year, group net revenue remained flat at GBP6.55 billion, but grew 6% on a like-for-like basis at constant currencies. It said like-for-like growth was driven by consumer health and hygiene, which saw an 8% rise in the third quarter and 7% rise in the nine months, both at constant currencies.
In the other end of the blue-chip index, Pearson was down 10% after the education and publishing company cut its earnings per share expectations for 2015 following its sale of its PowerSchool business, the FT Group and stake in The Economist Group, as well as continued challenging market conditions and currency movements.
Pearson had previously guided for earnings per share of between 75 pence and 80p, however, following these sales, as well as movements in exchange rates, this range is reduced by around 5p to between 70p to 75p.
The FTSE 100 index was down 0.2 at 6,331.82 points, the FTSE 250 was down 0.1% at 16,960.03 and the AIM All-Share was flat at 744.77. In Europe, the French CAC 40 opened down 0.2%, while the German DAX 30 was flat.
Bank of England Governor Mark Carney speaks at Oxford University at 1800 BST. He is expected to focus on how the UK's EU membership affects the central bank's ability to manage the economy and protect the country's banking sector.
UK's public sector net borrowing data are due at 0930 BST. Lloyds Bank senior economist Hann-Ju Ho looks for net borrowing on the ex-banks measure to be GBP9.8 billion in September, which would be GBP1.2 billion lower than the same month a year earlier.
"Higher borrowing in August and upward revisions to borrowing over April to July, particularly by local authorities, leave year-to-date borrowing in 2015/16 GBP4.4 billion lower against the equivalent five months last year," says Hann-Ju Ho. "Relative to the GBP20.6 billion reduction required to meet the Office for Budget Responsibility?s forecasts for the full financial year, the current run-rate is therefore a little behind schedule."
In Asia on Wednesday, the Japanese Nikkei 225 index ended up 1.9%. In China, the Shanghai Composite finished down 3.1%, while the Hang Seng in Hong Kong is closed for Chung Yeung Festival celebrations.
Wall Street ended lower Tuesday, with the DJIA and the S&P 500 both down 0.1%, while the Nasdaq Composite fell 0.5%.
The main focus in the US Wednesday is likely to be on the Ferrari initial public offering, which is due to accelerate off the starting grid at USD52 a share, valuing the sports car maker at USD10 billion.
Elsewhere in a light economic calendar, in the US, EIA crude oil stocks are due at 1530 BST.
By Daniel Ruiz; [email protected]
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Related Shares:
PearsonRB..LSmiths GroupMerlin EntertainmentsARM.L