WEBVTT - HSBC Stays Flat, Lufthansa Falls, Bayer Rises

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

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<v Speaker 2>Stock Movers 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>Well, let's take a look at some of the stocks

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<v Speaker 3>on the move today in Europe. I'm Tea Adabai with

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<v Speaker 3>Caroline Hapcat and we're joined by Bloomberg reporter Chloe Melly. Chloe,

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<v Speaker 3>let's start with HSBC earnings. They were released this morning.

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<v Speaker 3>How are they faring so far?

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<v Speaker 1>Yeah, so, ESBC, it looks pretty positive across the board

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<v Speaker 1>in terms of those earnings. So it resumed its buy back,

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<v Speaker 1>the profit beat estimates, and then it also improved its

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<v Speaker 1>cost cutting target. This was all quite a beat, but

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<v Speaker 1>it maybe was not quite enough to sustain the massive

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<v Speaker 1>rally that we had seen ahead of the results, and

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<v Speaker 1>so we saw shares down in Hong Kong trading and

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<v Speaker 1>they're a bit mixed in London this morning. So Samanda

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<v Speaker 1>said that the limited chaines to guidance were maybe a

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<v Speaker 1>little bit underwhelming, that perhaps the buy back itself was

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<v Speaker 1>a little bit underwhelming as well. The expectations were just

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<v Speaker 1>for more meaningful upgrade for HSBC, and so that's why

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<v Speaker 1>it's a little bit mixed this morning. Another interesting thing

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<v Speaker 1>to come out of those earnings today was the CEO

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<v Speaker 1>saying that HSBC could boost its bonus pool for bankers

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<v Speaker 1>if that strong performance continues. Barkley said something actually very

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<v Speaker 1>similar just last month, and so it seems that those

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<v Speaker 1>European banks are wanting to move to maybe similar page

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<v Speaker 1>structures to Wall Street banks, and so maybe that could

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<v Speaker 1>help with getting the best talent. We've obviously seen European

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<v Speaker 1>banks underperformed slightly their Wall Street piers.

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<v Speaker 2>Okay, so that on HSBC.

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<v Speaker 3>Meanwhile, as you say, the difficulty of rising oil prices.

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<v Speaker 3>The German airline leftans as seeing a really big drop today.

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<v Speaker 3>But it's not just about oil prices.

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<v Speaker 2>Interesting, Yeah, we lived out.

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<v Speaker 1>There's just a bunch of challenges for that company. So

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<v Speaker 1>it's yet another airline warning of that kind of growing

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<v Speaker 1>uncertainty for its outlook, you know, giving up its capacity

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<v Speaker 1>growth targets, just like AIG did earlier in the earning season.

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<v Speaker 1>The second quarter profit was also a less than half

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<v Speaker 1>what it was last year, and as you say, Caroline,

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<v Speaker 1>a lot of that due to fuel costs. Of course,

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<v Speaker 1>that has affected the entirety of that airline sector, but

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<v Speaker 1>specifically full of Tansa. There was the added challenge of

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<v Speaker 1>strike related costs as well, because there were walkouts from

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<v Speaker 1>pilots and cabin crew earlier this year, and Liftansa has

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<v Speaker 1>said that this was something that costs one hundred and

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<v Speaker 1>fifty million euros in the quarter, so not insignificant. And

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<v Speaker 1>this update from lust Tansa is really the latest sign

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<v Speaker 1>of how much pressure there is right now on European airlines.

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<v Speaker 1>You know, Luftanza has already announced plans to cut jobs.

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<v Speaker 1>It's decommissioned alder planes. It's also got rid of about

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<v Speaker 1>twenty thousand short haul flights, so it might have to

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<v Speaker 1>take even more other drastic measures if things don't improve,

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<v Speaker 1>if those costs keep rising. But it's not been a

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<v Speaker 1>very good ending season for that sector for sure.

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<v Speaker 3>Okay, so some difficulties for left handser. But on the

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<v Speaker 3>other side of the equation we have Bayer. They saw

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<v Speaker 3>an earnings beat this morning. What's the latest there.

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<v Speaker 1>Yeah, so Bayer saw an unexpected increase in a profit

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<v Speaker 1>for the second quarter and that was driven in particular

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<v Speaker 1>by the crop science business doing very well. So it

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<v Speaker 1>seems that things are starting to look up for Bayer

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<v Speaker 1>after years of litigation issues related to its roundup weed killer,

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<v Speaker 1>of course, and that had been kind of top of

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<v Speaker 1>mind for investors for years and years, But it seems

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<v Speaker 1>that things are starting to get a bit better in

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<v Speaker 1>that regard for Bayer. It received a favorable US Supreme

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<v Speaker 1>Court ruling back in June that sort of weakened a

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<v Speaker 1>key argument that was underpinning the majority of those legal cases.

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<v Speaker 1>And now the next big step for BYA is a

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<v Speaker 1>hearing on August nineteenth of its settlement proposal of seven

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<v Speaker 1>twenty five billion dollars, and so it got preliminary approval

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<v Speaker 1>for that, but not full approval yet. The full approval

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<v Speaker 1>would really allow by It to kind of finally get

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<v Speaker 1>rid of this legal overhang and really move forward. And

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<v Speaker 1>so we've seen the shares up significantly this year on

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<v Speaker 1>hopes that it can successfully manage these legal problems, and

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<v Speaker 1>now those positive earnings are adding to those games.

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<v Speaker 2>This morning the Stock Movers Report from Bloomberg Radio. Check

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