Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
International Airlines Group
International Airlines Group [LON:IAG], the parent company of British Airways, has provided an update to its full year profit guidance this morning. Strike action by BA pilots and the threat of a labour dispute by Heathrow airport staff is estimated to have cost the business EUR170 million. Add to this news that ‘booking trends’ in its low cost carrier segments are expected to have an adverse EUR45 million impact on profits and expectations are that the full year figure will come in around 6% down from a year ago. The clarity may provide some assurance, although an analyst call due imminently could raise fresh concerns over the unresolved pay dispute with flight crew.
There’s a pre-close trading update out from Imperial Brands [LON:IMB] this morning. A ‘sluggish’ performance – revenues tipped to rise 50% – for its next generation products has reigned in growth for the full year, with earnings per share expected to come in flat. Interestingly the company continues to see revenue and profit growth for the traditional tobacco business. Efficient savings and divestments will also stand to bolster the bottom line – no real red flags here by all accounts, but the market reaction will be worth watching.
A nine month trading update is out from the educational publisher Pearson [LON:PSON] today. This headlines with a note over adjusted profits for the full year now being likely to come in at the bottom end of the previously stated guidance range, after a significantly weaker than expected third quarter. One key challenge faced by the sector previously has been that when employment is strong in the US, this negatively impacts demand for education courses and there’s no sign of the labour market cooling any time soon across the Atlantic. Global diversification has helped mitigate some of this exposure, putting total growth as flat for the year to date.