A strong quarter from budget airline easyJet (LON:EZJ) helped the UK’s top shares climb back towards near-two month highs on Wednesday.
Shares in easyJet took off as it raised its profit guidance for the year after a strong quarter.
The low-cost carrier expects profit before tax for the full-year to be between £450 million and £480 million, assuming no further significant disruption. The median forecast from 23 brokers covering the stock is for pre-tax profit of £432.7mln, according to Factset.
The company said total revenue in the April to June quarter rose by 10.5% from a year earlier to £1.14bn, driven by a 3.6% increase in capacity and improvement in revenue per seat.
“easyJet has delivered a strong performance in the third quarter in a benign capacity environment for easyJet,” said chief executive Carolyn McCall.
“The strong performance demonstrates further progress against the easyJet strategy and the commitment to deliver returns and profitable growth for shareholders.”
easyJet shares were up 6.4% by lunch to 1,422p each.
The stock, which only recently joined the Footsie, helped the benchmark index rise more than 50 points or 0.8% to 6,650, its highest mark since the end of May when the pull-back began.
Not everyone in the City was impressed by the results of the company that provides the chips that power Apple’s iPads and iPhones.
Broker Numis Securities kept its ‘reduce’ rating, but raised its target price to 750p from 700p.
“We continue to believe that consensus is underestimating the impact of competition in mobile from Intel; however, if the momentum on licensing is sustained, this could partly offset this risk,” the Numis team conceded.
The stock trades on a multiple of 43 times projected earnings per share for this financial year, “which seems to price in flawless execution”.
Sales of outdoor and summer products jumped by nearly a fifth at B&Q in the last ten weeks and accounted for almost 40% of total sales, helping the shares rise 2.6% today.
It brought up the Chinese scandal that has rocked the British pharmaceutical giant in the last couple of weeks.
“Clearly, we are likely to see some impact to our performance in China as a result of the current investigation, but it is too early to quantify the extent of this,” said chief executive Andrew Witty in his first public comments on the matter.
“We are co-operating fully with the Chinese authorities in this matter,” he added.
Several top Glaxo executives have been arrested in China following police claims that it bribed doctors and hospitals to use its drugs and vaccines.
Sales in China rose 14% to £212mln in the second quarter, while sales worldwide grew 2% to £6.62bn.
“We are now on track to achieve a slightly better outcome (before any exceptional items) for the current financial year than previously anticipated,” it said.
Revenues rose by 14% in the six months to June despite a drop in the average price of gold over the period to US$1,492 an ounce from US$1,661.
The shares shone 3.7% higher.
There were plenty of big movers on the small cap market with Vane Minerals (LON:VML) leading the charge, up 30%, and Plethora Solutions (LON:PLE), which has a treatment for premature ejaculation, not far behind, rising 22%.