WEBVTT - Philips Up, Schaeffler Drops, Lufthansa Gains

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<v Speaker 1>Bloomberg Audio Studios.

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<v Speaker 2>Podcasts. Radio.

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<v Speaker 3>News.

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<v Speaker 2>The Stock Movers Report. Your roundup of companies making moves

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<v Speaker 2>in the stock market. Harnessing the power of Bloomberg data.

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<v Speaker 3>Let's take a moment to look at some of the

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<v Speaker 3>stocks on the move today in Europe. I'm Tiwa Adebayo

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<v Speaker 3>with Caroline Hepke. And we're joined in studio by Bloomberg's

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<v Speaker 3>breaking news editor, Louise Moon. Louise, let's start with Philips,

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<v Speaker 3>the Dutch medical devices maker. Shares rising today.

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<v Speaker 1>What is driving that? So, they had a bit of

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<v Speaker 1>a double whammy of good news.

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<v Speaker 4>So, firstly, third quarter results, better than expected profitability. That's

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<v Speaker 4>driven by higher sales, tighter cost controls. And then the

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<v Speaker 4>second bit of good news for them is that they've

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<v Speaker 4>reached an agreement in principle with the U.S. Justice Department.

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<v Speaker 4>That's over faulty sleep apnea devices and ventilators. This has

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<v Speaker 4>been quite a long-awaited settlement of the probe. A recall

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<v Speaker 4>happened in 2021, and it's hammered Philips' valuation ever since. So,

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<v Speaker 4>there's optimism now that this kind of long-running scandal is

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<v Speaker 4>nearing an end.

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<v Speaker 1>So, Philips has said they put aside a provision of

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<v Speaker 1>€ 288 million.

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<v Speaker 4>And that is expected to be paid in early 2027,

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<v Speaker 4>early next year. And let's just say that is larger

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<v Speaker 4>than thought. But overall, it's a milestone and a positive milestone. So,

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<v Speaker 4>shares rose as much as about 7% initially in morning trading.

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<v Speaker 4>And then they paired some gains, but they're still up

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<v Speaker 4>about 4%.

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<v Speaker 1>Okay.

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<v Speaker 4>So, on Philips, also, a supplier to VW has announced

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<v Speaker 4>thousands of job cuts.

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<v Speaker 1>It's got a lot of attention today.

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<v Speaker 3>Yeah.

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<v Speaker 1>So, this is Scheffler in Germany.

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<v Speaker 4>So, they're cutting 3,460 jobs in Europe, most of those

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<v Speaker 4>in Germany and its home country, about three quarters there.

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<v Speaker 4>They're also closing five sites in Europe. Again, mostly in Germany,

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<v Speaker 4>four in Germany and one in Belgium. Some of their

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<v Speaker 4>top executives are giving up about 10% of their base

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<v Speaker 4>salary as well.

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<v Speaker 1>All of this to produce savings.

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<v Speaker 4>That's expected to yield about £ 300.

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<v Speaker 1>Million in annual savings from 2030.

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<v Speaker 4>They're saying this is in response to this persistent downturn

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<v Speaker 4>that we've been seeing in the car industry and it's

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<v Speaker 4>impacting them given that they are car component suppliers, as

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<v Speaker 4>well as high costs in Germany.

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<v Speaker 1>So, yeah, I mean, the car industry has been facing

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<v Speaker 1>a lot of headwinds.

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<v Speaker 4>They've had weaker demand, rising competition from China, this slower

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<v Speaker 4>transition than expected to electric vehicles. And that's hitting it

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<v Speaker 4>across the board. For Scheffler, it's not great timing. This

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<v Speaker 4>comes just weeks after they finished an earlier restructuring program.

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<v Speaker 4>And Bloomberg Intelligence is saying that this does help, that

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<v Speaker 4>these cost cuts will help them reach their targets for

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<v Speaker 4>their margins, but still shares fell, I guess, as you

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<v Speaker 4>could expect, they fell over about 3% in morning trading.

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<v Speaker 3>And sticking with Germany, we've got airline Lufthansa. It's gaining today.

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<v Speaker 3>And that is despite higher fuel bills that we're seeing

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<v Speaker 3>across the industry, Louise. Yeah.

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<v Speaker 4>So, they've lowered their profit outlook for the year. And

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<v Speaker 4>as you say, that's based on higher fuel costs. So,

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<v Speaker 4>they're expecting their full year fuel bill to rise by

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<v Speaker 4>about € 2 billion. That's higher than they had expected before.

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<v Speaker 4>This is their second guidance report. cut or revision in

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<v Speaker 4>three months. So, earlier this year or early this year,

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<v Speaker 4>they had expected earnings to be significantly above last year

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<v Speaker 4>and then that's gradually changed.

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<v Speaker 1>On the back of all these.

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<v Speaker 4>Wider ways we've been seeing in the airline industry, we

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<v Speaker 4>had relatively similar commentary yesterday from Ryanair as well.

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<v Speaker 1>As you say, though, shares did rise.

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<v Speaker 4>I'm just saying that profit revision was widely expected. So,

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<v Speaker 4>they're focusing instead on the third quarter earnings that came today,

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<v Speaker 4>which were actually relatively positive. They were slightly better than

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<v Speaker 4>expected in terms of profitability. So, that's been the focus

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<v Speaker 4>and that's what's moving the shares in trading.

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