Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Rolls Royce [LON:RR] has been through a torrid time of late, but today’s full year results paint a rather more upbeat picture for shareholders. Revenues have advanced 7%, in turn driving a 25% increase in operating profits for the year. The company believes that the changes it has put in place over the last two years are sustainable and provide new direction for the business, with a further 15% growth in core operating profit expected next year. The note acknowledges however that with the potential macroeconomic impact of COVID19 still being understood, further updates to the market in this regard may be needed.
It’s been a tough week for markets, with travel stocks being amongst the worst performers. easyJet [LON:EZY] in particular has seen its market cap reduced by a quarter since Monday and the low cost airline has today provided an update to the market. A series of initiatives have been launched, including a recruitment freeze, budget cuts, staff being offered unpaid leave and aircraft being reallocated for the summer to ensure the highest possible revenue opportunities. It’s too early to be providing guidance on the scale of the impact here, but the airline has pledged further updates as soon as they are available.
International Consolidated Airlines
Sticking with the travel theme, International Consolidated Airlines [LON:IAG], the owner of British Airways, has published its full year results today, too. Revenues are up, but earnings per share have taken a hit off the back of the pilots’ strike. As with peer easyJet, it’s too early for the company to assess the impact of COVID19, but action is being taken to move capacity around in order to meet demand. The company’s current balance sheet is however said to be strong enough to mitigate any weakness, at least in the near term.