GSK reports rise in quarterly sales, Next raises full-year guidance

London open

The FTSE 100 is expected to open 37 points lower on Wednesday, having closed down 0.8% on Tuesday at 8,219.61.

Stocks to watch

GSK reported a 2% increase in constant exchange rate sales in its third-quarter results on Wednesday, to £8bn, with strong specialty medicines growth offsetting a 15% decline in vaccine sales, affected by shifts in US vaccination priorities. The FTSE 100 pharmaceuticals giant said that w\hile total operating profit fell 86% due to a £1.8bn Zantac settlement charge, core operating profit and earnings per share each rose 5%, driven by specialty medicines and cost management. It reaffirmed its 2024 guidance, expecting turnover growth of 7% to 9% and mid-range core profit growth, with a third quarter dividend of 15p and a projected full-year dividend of 60p.

Next lifted its guidance for both the crucial fourth quarter and the full year, after the recent cold snap caused sales to surge. Updating on trading, the blue chip retailer said full price sales surged 7.6% in the 13 weeks to 26 October, well ahead of the 5% uplift it had forecast. Next attributed the better-than-expected performance to the arrival of colder weather this year, which compared favourably to last year’s unusually warm September and early October. As a result, Next lifted guidance for fourth-quarter full price sales, to 3.5%, and full-year profits and sales.

Newspaper round-up

Starbucks office workers will risk losing their jobs if they fail to comply with the company’s hybrid work requirement that employees are in the office three times a week. According to the Wall Street Journal an internal message sent to employees warns that an “accountability process” will start in January 2025. Consequences for non-compliance are “up to, and including, separation”, according to the company message. – Guardian

Santander is cutting more than 1,400 jobs across its UK business this year as part of its efforts to reduce costs. The Spanish bank’s chief executive officer, Hector Grisi, confirmed the cuts as its UK division delayed publication of its latest financial results to consider the impact of an influential court ruling linked to commission on car finance. Grisi told a press conference on Tuesday that the company would cut 1,425 jobs in the UK as it automated more of its operations. It is understood that the redundancies are largely completed and will be done by the end of the year. – Guardian

Rachel Reeves’s feared inheritance tax (IHT) raid has triggered a surge in investors racing to sell funds which own UK companies listed on the stock market. Investors pulled nearly £300m from funds specialising in small UK companies last month – almost a four-fold increase on the £80m withdrawn in August, according to Morningstar Direct. Mid-sized UK stocks also suffered from Budget uncertainty, with funds reporting outflows for the first time since March. – Telegraph

Alphabet, the parent company of Google, beat Wall Street’s profit and revenue expectations as artificial ­intelligence technology continues to drive growth in cloud computing sales and search engine advertising. Sundar Pichai, Alphabet’s chief executive, hailed the “extraordinary” momentum across the business as the company reported a 33.6 per cent increase in third-quarter net profit to $26.3 billion, outpacing Wall Street estimates of $22.9 billion. – The Times

Rolls-Royce, a frontrunner in the race to deliver Britain’s first mini nuclear power plants, has sold a 20 per cent stake in its business developing the nascent technology. The Czech power company CEZ is understood to have paid millions of pounds for the stake in Rolls-Royce SMR as part of a joint push by the companies to deploy small modular reactors (SMRs). The utility has placed an order for units producing three gigawatts of electricity in the Czech Republic. – The Times

US close

US stock markets finished mixed on Tuesday as investors kept a lid on risk appetite amid a barrage of corporate earnings and economic data, though the Nasdaq still managed to push ahead to a new high.

The Dow finished 0.4% lower at 42,233.05, while the S&P 500 rose 0.2% to 5,832.92, and the Nasdaq gained 0.8% to 18,712.75, topping its previous record of 18,647.45 reached on 10 July.

While plenty of earnings were released during the session, tech stocks were in focus with five of the Magnificent Seven stocks all due to report this week. Google parent Alphabet is up first with results due out after Tuesday's closing bell.

Blue chips Snap, Reddit and Advanced Micro Devices were also in focus ahead of their quarterly numbers due out after the close.

On the macro front, preliminary numbers from the Commerce Department revealed that the US trade deficit had widened 14.9% to a two-and-a-half-year high of $108.2bn in September.