WEBVTT - Shell, WPP Plummets, Volkswagen Gains

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News, The.

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<v Speaker 2>Stock Mover's Report, your roundup of companies making moves in

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<v Speaker 2>the stock market, harnessing the power of Bloomberg data.

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<v Speaker 3>Let's take a look at some stocks on the move

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<v Speaker 3>today in your I'm Tom McKenzie alongside Stephen Carroll. We

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<v Speaker 3>are joined by Bloomberg reporter Chloe Mellie Chloe. We start

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<v Speaker 3>with Shell third caught a profit better than expected at

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<v Speaker 3>a time of weaker oil prices. What's going on?

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<v Speaker 1>Yeah, So, as you said, weaker energy prices that dragged

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<v Speaker 1>down and a little bit we saw that with Equinoy yesterday.

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<v Speaker 1>But what was helped for Shell was that there was

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<v Speaker 1>a rebound in performance by its oil and gas traders.

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<v Speaker 1>So last month Shell had already said that oil and

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<v Speaker 1>gas trading profits had actually recovered, and that was after

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<v Speaker 1>Shall and also a lot of its peers that really

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<v Speaker 1>struggled to navigate the really sharp market swings that we

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<v Speaker 1>saw over the second quarter that were of course driven

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<v Speaker 1>by a lot of geopolitical uncertainty. Shall also in the

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<v Speaker 1>pace of share buy bags, which is something that investors

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<v Speaker 1>care a lot about when it comes to those oil majors,

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<v Speaker 1>and that really reassured the market. It seems that the

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<v Speaker 1>overall the CEO's strategy has been working out quite well

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<v Speaker 1>for Shell. He's been spending the past couple of years

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<v Speaker 1>cutting costs and getting rid of underperforming assets to try

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<v Speaker 1>and close that valuation gap with US rivals, and so

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<v Speaker 1>far that seems to be working quite well. Our shares

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<v Speaker 1>are up sixteen percent since the start of twenty twenty

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<v Speaker 1>five and outperforming it's peers. So everything is going quite

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<v Speaker 1>well for SHALL so far. We'll see how BP actually

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<v Speaker 1>does next week.

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<v Speaker 4>Yeah, inde chall share is just down half of one

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<v Speaker 4>percent this morning in London. The big share move though

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<v Speaker 4>on the London market has been WPP, currently down around

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<v Speaker 4>ten percent, but the hit shares hit. They're lower since

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<v Speaker 4>two thousand and eight earlier as well. What's driving those

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<v Speaker 4>shares lower this morning.

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<v Speaker 1>Well, it cut it's sales guidance and that is something

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<v Speaker 1>that I had already done in July, so this is

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<v Speaker 1>now the second cut this year. And they also announced

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<v Speaker 1>that it would revamp its entire structure to try and

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<v Speaker 1>become more efficient. So this is the first set of

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<v Speaker 1>results under the new CEO, Cindy Rose, who started just

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<v Speaker 1>last month on September the first, and she's now got

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<v Speaker 1>quite a massive, massive task ahead of her. She needs

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<v Speaker 1>to make some really big changes to kind of reverse

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<v Speaker 1>what has been a very weak performance for a while

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<v Speaker 1>for WPP. It's fallen way behind its big rival, Publicist,

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<v Speaker 1>which actually upgraded guidance this season, so we can see

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<v Speaker 1>how we've got two very diverging paths there, and it's

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<v Speaker 1>also seen the loss of some really major accounts for

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<v Speaker 1>the WPP. So now Rose is having to kind of

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<v Speaker 1>adapt the agency to a new environment where AI tools

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<v Speaker 1>are really changing the advertising world. And we've also seen

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<v Speaker 1>a lot of reduced client spending on marketing because of

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<v Speaker 1>macroeconomic uncertainty. So a CEO called the recent performance unacceptable

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<v Speaker 1>and she said she'd have to make really big changes,

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<v Speaker 1>and now we'll announce that plan in the new year,

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<v Speaker 1>so we'll see how that goes.

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<v Speaker 3>Okay, So from advertising to the auto makers and geopolitics

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<v Speaker 3>hitting the German giant Volkswagen.

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<v Speaker 1>Yeah, so Volkswagen said that it would need a sufficient

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<v Speaker 1>supply of semiconductors to be able to meet its financial

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<v Speaker 1>targets for twenty twenty five. So that's all related to

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<v Speaker 1>this whole experior at debacle, so it's a really clear

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<v Speaker 1>signal that the shortage of chips from an experior is

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<v Speaker 1>having a major impact on those European carmakers. Volkswagen said

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<v Speaker 1>that it had secured enough components for the coming week

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<v Speaker 1>to keep the German production plants running, but that it

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<v Speaker 1>couldn't rule out disruption to production beyond at that time,

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<v Speaker 1>so that's obviously a big negative. But actually shares did

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<v Speaker 1>gain this morning because there was a really strong free

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<v Speaker 1>cash flow and really strong margin in the earning, so

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<v Speaker 1>as some anlist said that that really sets the stage

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<v Speaker 1>for a potential reset in twenty twenty six, which echoes

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<v Speaker 1>what we had from Mercedes yesterday with the shares rising

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<v Speaker 1>because investors were expecting the worst to kind of be behind.

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<v Speaker 1>So it seems to be maybe the light of the

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<v Speaker 1>end of the tunnel for their European car sector.

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<v Speaker 2>The Stock Mover's report from Bloomberg Radio. Check back with

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