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Ericsson Reports Drop in Operating Earnings, CEO Sees Gradual Recovery
Swedish telecom company Ericsson’s shares fell 4.5% on Tuesday after the firm reported a drop in adjusted operating earnings to SEK4bn ($387m) in Q1 2023 from SEK4.8bn a year ago. The result, which beat analysts’ forecast of SEK3.28bn, came after Ericsson announced it would cut 8,500 jobs as its margins are squeezed by competitively-priced telecoms rivals. CEO Börje Ekholm said Q1 had been “challenging” due to sales hit by customers adjusting their inventory, but praised the growth in new 5G markets and Ericsson’s plan to maintain mobile network industry leadership.
GSK to Buy Drug Developer Bellus Health for $2bn
Pharmaceutical giant GlaxoSmithKline (GSK) announced on Tuesday it would acquire Canadian drug development firm, Bellus Health Inc, for $2bn in an all-cash deal. GSK’s Chief Commercial Officer, Luke Miels, cited Bellus Health’s treatment for chronic coughs, called Camlipixant, as holding “significant sales potential and the potential to be a best-in-class treatment”. GSK’s offer of $14.75 per share was more than double the value of Bellus’ closing price on the Nasdaq on Monday.
EasyJet Lifts Profit Estimates in Q1 Trading Update
Low-cost airline EasyJet said on Tuesday it expects to beat full-year profits of around £260m ($322m). In a trading update, the carrier announced a £133m loss before tax in Q1 but also reported a 47% rise in passenger numbers. CEO Johan Lundgren said the company was experiencing strong summer booking demand and demand over Easter.
Online Retailer THG Reports Higher Revenue
Ahead of news Monday that it had received a “highly preliminary” buyout proposal from Apollo Global Management, online retailer The Hut Group (THG), a British firm, reported £2.24bn ($2.78bn) in revenue and adjusted full-year earnings of £64.1m. THG cited a strategy to minimise customer inflation as the reason behind a drop in gross margin from 44.7% to 41.3%.
China’s Economy Grows More Than Expected in Q1 2023
China’s GDP rose by 4.5% in the first quarter of 2023, according to the National Bureau of Statistics, exceeding the forecast of 4% in a Reuters poll. It also marks the fastest expansion since Q1 2023. Retail sales in March showed a double-digit growth of 10.6%, though industrial output rose only to 3.9% from the forecasted 4%, according to the news agency.
Citi Sees ESG Rebound; Goldman Sachs Names E-commerce Stock Picks
Investments in Environmental, Social, and Governance stocks underperformed the broader market in 2023, but Citigroup strategists expect the theme is set to rebound in 2023. Goldman Sachs, meanwhile, has identified four stocks for investors to capitalise on the e-commerce industry as the sector experiences secular growth tailwinds towards a possible $4.8tn in global sales by 2026.
Earnings Season Expected to Decline But Starts Strong
Despite fears of falling earnings, data from Bank of America shows earnings season has begun in spring 2023 positively. Of 30 companies reporting, 90% exceeded their earnings per share expectations last week, making it one of the most positive starts since 2012, according to analysts. However, companies that depend on credit conditions may still face headwinds if credit conditions deteriorate.
