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Market Update

Ryanair Profit Surges 7%; HSBC, PostNL Net Swing to Loss


Author: Sarla Buch
ticker.com
Last Update: 10:42 AM ET November 07 2016

4:00 PM Frankfurt – HSBC net swung to a loss after the bank booked $1.7 billion charge for selling its Brazil business. PostNL net swung to a loss and rejected higher takeover offer from Belgium-based rival Bpost. Ryanair profit surged 7% and plans for additional share buyback of up to €550 million.

In London trading, FTSE 100 index soared 104.76 or 1.6% to 6,798.02 and in Frankfurt the DAX index advanced 175.62 or 1.7% to 10,434.75.

In Paris, CAC 40 index jumped 76.95 or 1.8% to 4,454.41.

HSBC Holdings Plc fell 0.4% to 594.75 pence after the U.K.-based banking and financial services provider reported revenues in the third-quarter ending in September plunged 38.1% from a year ago to $8.95 billion.

Net in the quarter swung to a loss from a year ago to $204 million compared to the profit of $5.2 billion and diluted loss per share swung to 0.03 cents from diluted earnings per share of 25 cents.

The bank booked $1.7 billion charge for selling its Brazil business and also hit by adverse foreign currency movements, as a result its pre-tax profit tumbled 86% to $843 million compared to $6 billion in the same period a year ago.

During the quarter, HSBC generated additional savings of $57 billion under which $40 billion came from the sale of its Brazil business and now more than 80% of the way to achieve the target of RWA reduction.

The bank reported adjusted revenue in the quarter gained 2.4% to $12.8 billion and adjusted operating costs dropped 3.5% to $7.25 billion. In Asia adjusted pre-tax profit soared 10% to $3.8 billion while in the Europe adjusted pre-tax profit jumped 5.4% to $863 million from a year ago period.

“The U.K. bank’s numbers have been reasonably robust since Brexit,” chief executive officer Stuart Gulliver said but couldn’t comment on the observations.

PostNL NV soared 4.3% to €4.91 after the Netherlands-based mail and parcel networks said revenues in the third-quarter ending in September fell 1% from a year ago to €770 million.

Net in the quarter swung to a loss from a year ago to €9 million compared to the profit of €18 million and diluted loss per share swung to €2.1 from diluted earnings per share of €4.30.

Separately, today PostNL rejected higher “conditional and unsolicited proposal” takeover offer from Belgium-based rival Bpost at a price of €2.825 in cash per share plus 0.1202 bpost shares per PostNL share.

Ryanair Holdings Plc jumped 5% to €13.41 after the Ireland-based ultra-low fare airline services provider reported revenues in the first-half ending in September increased 2% from a year ago to €4.13 billion.

Net profit in the quarter surged 7% from a year ago to €1.18 billion compared to the €1.09 billion and diluted earnings per share increased to €91.76 from €79.47.

The budget airline said increasing in profit was mainly due to strong forward bookings, higher load factors and 12% traffic growth to 65 million customers and raised long-term traffic forecast by 10% and forecasted to carry more than 200 million passengers per year by March 2024.

Ryanair reaffirmed with revised full-year guidance between €1.30 billion and €1.35 billion but unit costs may fall 3% on limited fourth-quarter visibility and absence of Easter, estimated fares likely continue to fall.

The airline group’s board authorised additional share buyback of up to €550 million in four month period to February 2017.

SNAM SpA increased 1.8% to €3.91 after Italy-based natural gas services provider intends to spins off its domestic-gas-distribution subsidiary, Italgas.

Telia Company AB gained 0.8% to 35.02 Swedish kronor after Sweden-based mobile, broadband and fixed-line service provider agreed to acquire Norway-based SME services provider Phonero for about 2.3 billion Norwegian kroner or €253.11 million on a cash and debt free basis.

In the year ending in June, Phonero reported net sales of 1.1 billion Norwegian kroner and operating profit of 217 million kroner.

The deal is expected to close in the first-quarter of 2017.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc