Bulletin
Investor Alert

New York Markets After Hours

London Markets Archives | Email alerts

Feb. 3, 2021, 10:48 a.m. EST

FTSE 100 flattens amid earnings tug of war between Vodafone and GlaxoSmithKline

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    FTSE 100 Index (UKX)
  • X
    British Pound (GBPUSD)
  • X
    Vodafone Group PLC ADR (VOD)

or Cancel Already have a watchlist? Log In

By Barbara Kollmeyer

The FTSE 100 largely sat out a positive session across European bourses on Wednesday, amid mixed earnings news for two big blue chips.

The main U.K. index /zigman2/quotes/210598409/delayed UK:UKX +0.25% was last down 0.1% to 6,509.63, with the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0800% also unchanged, trading hands at $1.3658 against the dollar. The telecommunications and drug sectors were headed in opposite directions.

Shares of heavily weighted Vodafone /zigman2/quotes/202862751/composite VOD +0.06% /zigman2/quotes/202484985/delayed UK:VOD -0.09% climbed 5%, after the telecoms group said it returned to organic service revenue growth in the third quarter of fiscal 2021, and reiterated full-year guidance.

Vodafone’s service revenue growth is now positive, with a gain of 0.4% year-on-year versus a drop of 0.4% in the second quarter and ahead of Barclays’ own estimates for a 0.5% drop, said a team led by Maurice Patrick.

“The key source of the beat is in Germany, where growth was +1%, vs our -0.4% estimates,” said Patrick and the team in a note. “We believe these results should be taken positively, with no markets getting visibly worse (Italy clearly remains challenging), and Germany growth picking up.”

Attempts by Vodafone shares to bolster the U.K. index were thwarted by another heavyweight, drug company GlaxoSmithKline /zigman2/quotes/209463850/composite GSK +0.10% /zigman2/quotes/200381158/delayed UK:GSK +0.27% , whose shares dropped over 4%. The group reported a 48% fall in fourth-quarter net profit, partially due to lower disposal profits and increased restructuring costs.

Glaxo said it expects 2021 adjusted earnings per share to fall in the mid to high-single digit percentage bracket at constant exchange rates.

Read: AstraZeneca vaccine may reduce spread by 67% — and protection remains over 3-month dosage gap

“These results are a bit of a mess — with a dozen moving parts and disappointing underlying numbers. The acquisition of Pfizer /zigman2/quotes/203243414/delayed UK:0Q1N +0.05% is boosting headline revenues and profits, but strip that effect out and sales are going backwards,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown, in a note to clients.

Hyett also noted a COVID-19 pandemic hit on demand for drugs such as antibiotics, which are usually more reliable, though he said “robustly positive” free cash flow was a plus.

“GSK is a company in transition — and by 2022 will be starting life as two separate companies. While we haven’t always supported breaking the business up, we now think the move can’t come soon enough. GSK in its current iteration seems to be struggling to set out a clear vision of what it offers investors. Hopefully its successor companies are a little more streamlined,” he said.

GlaxoSmithKline also announced a €150 million ($180.7 million) partnership with German biotech CureVac /zigman2/quotes/219999729/composite CVAC +2.75% to develop new COVID-19 vaccines. CureVac shares rose in U.S. trading.

/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,222.82
+18.27 +0.25%
Volume: 496,731
Oct. 25, 2021 4:58p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.3769
+0.0011 +0.0800%
Volume: 0.0000
Oct. 25, 2021 4:38p
loading...
/zigman2/quotes/202862751/composite
US : U.S.: Nasdaq
$ 15.49
+0.01 +0.06%
Volume: 2.51M
Oct. 25, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
6.80%
Market Cap
$41.88 billion
Rev. per Employee
$486,182
loading...
/zigman2/quotes/202484985/delayed
UK : U.K.: London
110.72 p
-0.10 -0.09%
Volume: 38.68M
Oct. 25, 2021 4:35p
P/E Ratio
582.74
Dividend Yield
7.06%
Market Cap
£30.41 billion
Rev. per Employee
£372,306
loading...
/zigman2/quotes/209463850/composite
US : U.S.: NYSE
$ 39.81
+0.04 +0.10%
Volume: 4.33M
Oct. 25, 2021 4:00p
P/E Ratio
16.93
Dividend Yield
5.02%
Market Cap
$97.94 billion
Rev. per Employee
$464,855
loading...
/zigman2/quotes/200381158/delayed
UK : U.K.: London
1,424.60 p
+3.80 +0.27%
Volume: 4.44M
Oct. 25, 2021 4:35p
P/E Ratio
16.38
Dividend Yield
5.62%
Market Cap
£71.11 billion
Rev. per Employee
£362,501
loading...
/zigman2/quotes/203243414/delayed
UK : U.K.: London
$ 42.79
+0.02 +0.05%
Volume: 4,902
Oct. 25, 2021 4:35p
P/E Ratio
18.32
Dividend Yield
3.65%
Market Cap
$241.98 billion
Rev. per Employee
$533,860
loading...
/zigman2/quotes/219999729/composite
US : U.S.: Nasdaq
$ 39.64
+1.06 +2.75%
Volume: 363,774
Oct. 25, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.18 billion
Rev. per Employee
$100,563
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.