2024-07-30 17:24

July 30 (Reuters) - Pfizer (PFE.N) , opens new tab raised its annual profit forecast on Tuesday, helped by cancer treatments acquired through a $43 billion deal for Seagen and strong sales of its heart disease drug as the company deals with a sharp revenue drop from COVID products. The market for Pfizer's COVID-19 vaccine and treatment has shrunk by billions of dollars a year. Pfizer CEO Albert Bourla responded with several acquisitions, including the Seagen deal and cost-cutting measures. The New York-based drugmaker also has sharpened its focus on cancer treatments. Investors fled from Pfizer as COVID worries declined and the company's shares are trading at around half their pandemic-era highs. "The market is waiting to see if this company can execute," Bourla said in an interview. "We will continue executing this year, on our cost containment, on our pipeline, on all our new product launches ... and that's what I think should be able to turn around our stock price." J.P. Morgan analyst Chris Schott said he expects Pfizer's stock to continue to trade in the current range due to limited revenue growth and stronger expectations for many of its rivals. "We believe stronger new launch performance and/or further progress on the pipeline will be necessary to significantly change the narrative," he wrote in a research note. Pfizer shares were basically flat at $30.67. Sales of Eliquis, the blood thinner it shares with Bristol Myers Squibb (BMY.N) , opens new tab, are expected to be curtailed starting in 2026, when the U.S. begins using negotiated prices for some drugs for its Medicare health plan for people age 65 and over. Bourla said negotiations over Eliquis with U.S. regulators were tough. Still, Pfizer executives echoed comments from other drugmakers earlier this month, saying it expects to be able to navigate the impact of the new price on Eliquis, which it sees as an important drug for the company for the foreseeable future. Overall, the impact of the law allowing U.S. price negotiations on Pfizer "is somewhat muted as you think about it economically," Chief Financial Officer David Denton said. He said many products that could be selected for negotiation in the coming years will be nearing the end of their patent protection. Quarterly sales grew 3% operationally to $13.3 billion, marking its first quarter of sales growth since COVID revenue peaked in late 2022. The quarter was helped by sales of its heart disease drug, sold under brand names Vyndaqel or Vyndamax and cancer therapy Padcev. Pfizer now expects annual profit to be in the range of $2.45 to $2.65 per share, compared with its prior forecast of $2.15 to $2.35. BMO Capital Markets analyst Evan Seigerman said given the company's previous conservative forecast, the increase was somewhat expected. "Still, we are encouraged to see Pfizer executing where it matters," he wrote in a research note. Pfizer also raised its full-year sales forecast for its antiviral treatment Paxlovid for high-risk COVID cases by $500 million to $3.5 billion. Vyndaqel sales came in $200 million ahead of analyst estimates at $1.32 billion for the quarter, according to LSEG data. Sales Padcev, used to treat bladder and urinary tract cancers, were $394 million in the quarter, beating estimates of $362 million. Quarterly sales of the COVID vaccine Pfizer makes with German partner BioNTech (22UAy.DE) , opens new tab were $195 million, while Paxlovid sales were $251 million. Analysts were expecting sales of $176 million for Comirnaty and $247.7 million for Paxlovid. Pfizer was disappointed with its 2023 launch of RSV shot Abrysvo, but the company expressed optimism about the vaccine in the U.S. this year. "We've significantly strengthened our contracting position," said Pfizer's Chief U.S. Commercial Officer Aamir Malik, noting that those decisions are set to take effect in August. Last year, rival GSK (GSK.L) , opens new tab won two-thirds of the RSV vaccine market, mostly due to its contracts with retail pharmacies. Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/pfizer-raises-annual-profit-forecast-after-better-than-expected-covid-sales-2024-07-30/

2024-07-30 16:07

TOKYO, July 31 (Reuters) - Japan will retain its basic approach on the yen with intervention remaining an option to tackle excessively volatile moves in the exchange rate, the country's new top currency diplomat Atsushi Mimura told Reuters. "Japan will act under internationally agreed commitments that exchange rates should be determined by markets, but that excessive volatility or disorderly movements can have an adverse impact on economic and financial stability," Mimura said in an interview on Tuesday. "It has been internationally agreed that measures including interventions are allowed when necessary," he added. Previously head of the ministry's international bureau, the 57-year-old became vice finance minister for international affairs on Wednesday - a post that oversees Japan's currency policy and coordinates economic policy with other countries. Mimura's appointment comes as the Japanese currency shows tentative signs of recovery from 38-year lows, as investors unwound their long-running bets against the currency ahead of a Bank of Japan meeting this week. While a weak yen gives exports a boost, it has become a source of concern for policymakers by pushing up the cost of imports and hurting consumption. His predecessor, Masato Kanda led massive bouts of yen-buying intervention in 2022 and 2024 during three years in the position and was also known to aggressively warn markets against pushing down the yen. "A change in vice finance minister for international affairs doesn't mean a change in basic policy for not just foreign exchange but various things as they are decided by the finance ministry as an institution," Mimura said. He declined to comment on the current market situation, saying that such comments could have an unforeseen impact on markets. Mimura, meanwhile, hinted at a potential change in the style of communications with markets. "Communicating with markets is extremely important," he said. "Being always vocal is one style of communication, but not speaking may also be another way of communication. We must avoid creating unnecessary market speculation or uncertainties, but communication can be done both by speaking and not speaking." Mimura also said the Ministry of Finance will continue cooperating with the Bank of Japan and the financial regulator, the Financial Services Agency, as the three parties need to be on the same page regarding macroeconomic policy. Mimura said it is true that the yen's effective exchange rates have weakened due to decades of deflation, and the only and natural solution is to improve Japan's economic competitiveness and boost the country's growth potential. "Areas of growth could not just be limited to traditional manufacturing but also in inbound tourism, pop culture, soft culture and others," he said. Having spent nearly a third of his 35-year government career at Japan's banking regulator, Mimura has the expertise and international ties in the area of financial regulation. During his three-year stint at the Bank for International Settlements in Basel, Mimura helped set up the Financial Stability Board in the midst of the 2008-2009 global financial crisis to reform financial regulation and supervision. Sign up here. https://www.reuters.com/markets/currencies/japans-new-currency-diplomat-keeps-intervention-table-stabilise-yen-2024-07-30/

2024-07-30 15:19

July 30 (Reuters) - Hedge fund manager Bill Ackman said on Tuesday that is his new portfolio in the United States will raise roughly $2 billion in capital, a fraction of the $25 billion the billionaire investor had initially expected to bring in. Pershing Square USA, Ackman's first new investment vehicle in a decade, expects to sell up to 40 million shares priced at $50 each. It will begin trading on the New York Stock Exchange under the symbol PSUS on August 6, a person familiar with the matter said on Tuesday. Institutional investors have until Friday to express interest while retail investors, who may have become familiar with Ackman through his frequent postings on social media platform X, had until July 24 to submit interest. Banks including Citigroup Global Markets, UBS Securities, BofA Securities and Jefferies have been granted an option to purchase an additional 6 million shares at the IPO price. The 45-day option, if exercised, would add $300 million more for the fund. Ackman's firm Pershing Square Capital Management put $500 million into its new U.S.-listed investment holding company, the hedge fund manager said in a presentation earlier this month. Raising roughly $2 billion in a closed-end fund structure is considerable after no new closed-end funds were raised last year and only six were raised in the previous year, according to industry data. But it is only a fraction of the $25 billion that investors thought Ackman might be able to raise when he unveiled plans in February for the offering that will mimic his hedge fund while charging lower fees and offering quicker access to capital. That amount of cash would have more than doubled the $19 billion in assets Ackman already oversees, increasing the pressure to find new winning investments to continue his strong performance track record. By last week, Ackman sensed potential investors' growing unease with the closed-end fund structure and how so much capital could be invested. In a letter to people who own a stake in his management company, Ackman said last Wednesday that he was capping the size of the offering at $10 billion and was expecting to see between $2.5 billion and $4 billion in new cash come in. The most "important factor for creating long-term value for Pershing Square Inc. is not the size of the PSUS IPO, but how it trades in the market," Ackman wrote in the letter which his lawyers made public on Thursday. The Securities and Exchange Commission had to review the letter which created a delay of roughly one week for the offering to start trading. Ackman and his investment team met with nearly 100 of the biggest hedge funds and mutual funds to discuss Pershing Square USA. A decade ago he raised $2.9 billion for Pershing Square Holdings, which was listed in Amsterdam. He counted on his popularity on X, where he has roughly 1.3 million followers and weighs in on topics of the day ranging from politics to higher education, to woo retail investors to support the fund. The fund has said it will acquire and hold positions in 12 to 15 large capitalization, investment grade, free-cash-flow-generative undervalued companies in North America. Ackman already has two unidentified new investments, he told people close to the fund and he expects to use X much more to share investment updates. Since January, Pershing Square Holdings, which provides his firm permanent capital, has returned 6.4%. Since its launch two decades ago, Ackman's hedge fund returned 16.5% a year. Had it existed in its current form, Pershing Square USA would have returned 19.4% during that time, he said in a video to attract investors to the deal. Those returns would have outperformed the S&P 500 stock market index by 9.3 percentage points per year. Over the last 6-1/2 years it would have returned 31%, he said in the video. Sign up here. https://www.reuters.com/markets/deals/bill-ackmans-pershing-square-looks-raise-up-2-bln-ipo-2024-07-30/

2024-07-30 14:10

PayPal raises 2024 adjusted profit forecast Returns to transaction margin growth Shares jump 9% in morning trading Total payments volume surge 11% July 30 (Reuters) - PayPal (PYPL.O) , opens new tab on Tuesday raised its forecast for full-year adjusted profit for the second time after its branded checkout business outperformed and eased competition worries, sending its shares up 9% in morning trading. Tech giants Apple (AAPL.O) , opens new tab and Google parent Alphabet (GOOGL.O) , opens new tab have expanded into digital payment offerings in recent years, causing analysts and investors to fear that they will take a bite out of PayPal's market share in its mainstay business. "If we narrow down into desktop/web which is 40% to 50% of all checkout, we see no degradation in our share over the past four years. We have held share despite competition," CEO Alex Chriss said in a call with analysts, responding to a question about the increasing adoption of Apple Pay. American consumers have also remained remarkably hardy despite feeling the pinch from higher utility and credit card bills. PayPal is betting on continued spending resilience through the key back-to-school and upcoming holiday shopping seasons. The company now expects adjusted profit growth in a "low to mid-teens percentage" in 2024, compared with its April forecast of a "mid-to-high single-digit" increase. Its adjusted earnings per share rose to $1.19 in the three months ended June 30, versus 87 cents a year ago. "While a gross profit beat was expected, magnitude of the upside surprised positively," analysts at Jefferies said. Total payment volumes increased 11%, to $416.81 billion in the second quarter, while revenue climbed 9%, to $7.89 billion on an FX-neutral basis. TURNAROUND IN PROGRESS Easing some investor worries that have weighed heavily on the stock, total payments volumes in branded checkout grew roughly 6% in the second quarter. PayPal said branded checkout, Braintree, and Venmo contributed to the highest transaction margin dollars growth rate since 2021. Margin dollars are a key measure of the profitability of its core business. Chief Financial Officer Jamie Miller said in a call with analysts that the company expects lower volume and revenue growth through the second half of the year, in line with its plan to prioritize high-quality profitable growth. "This is deliberate and shows good progress," she said. Transaction margin dollars jumped 8% in the quarter, to $3.61 billion, surpassing expectations of a nearly 1% gain. "We returned the company to transaction margin growth, we returned the company to consumer user growth, we significantly improved profitability of Braintree and we are accelerating Venmo," Chriss said. PayPal's operating margins expanded 231 basis points on an adjusted basis, to 18.5% in the quarter, thanks to cost cuts and restructuring efforts. Sign up here. https://www.reuters.com/technology/paypal-lifts-2024-profit-forecast-spending-holds-up-margins-improve-2024-07-30/

2024-07-30 12:27

July 30 (Reuters) - Global grains merchant Archer-Daniels-Midland Co (ADM.N) , opens new tab missed Wall Street expectations for second-quarter profit on Tuesday, hit by lower soy crush margins and waning demand for U.S. crops. The company reported adjusted profit of $1.03 per share for the three months to June 30, against analyst expectations of $1.22 per share, LSEG data shows. The company's Ag Services and Oilseeds arm, its largest business unit, suffered a 56% plunge in operating profit after South American farmers were slow to sell their crops even as demand from export buyers grew, the company said. As soybean prices have fallen to their lowest in nearly four years, leading buyer China has shifted its focus to Brazilian and Argentinian supplies, weighing on the company's North American business. Meanwhile, ADM's global soybean crush margins decreased on supply and demand issues while soybean oil prices fell on pressure from increased imports of used cooking oil, it said. Global grain and oilseed supplies that companies such as ADM trade and process have surged, knocking back prices. In the United States, farmers have been sitting on larger than normal stocks as export demand for new-crop supplies have remained sluggish and China has turned to South America for much of its soybean needs. "In Ag Services & Oilseeds, while large South American crops and shifts in farmer selling behaviors impacted results in the second quarter, we expect improved margin opportunities through the remainder of the year," CEO Juan Luciano said in a statement. Sign up here. https://www.reuters.com/markets/commodities/adm-misses-profit-estimates-us-demand-dip-lower-crush-margins-2024-07-30/

2024-07-30 12:09

July 30 (Reuters) - Refiner Phillips 66 (PSX.N) , opens new tab reported quarterly results that beat analysts' estimates, helped in part by strength at its midstream and chemicals units and higher processed volumes, even as it grappled with lower margins due to a tepid summer driving season. Refiners process crude oil into gasoline, diesel, jet fuel and other products. They ramped up processing capacity to 93.5% in the second quarter, compared with 91% in the same period last year, according to the U.S. Energy Information Administration, on expectations of an uptick in demand that did not materialize. While Phillips 66's crude capacity utilization stood at 98% in the second quarter compared with 93% a year earlier, the company's realized margins fell to $10.01 per barrel from $15.32. The refining segment's earnings slumped 74.3%. Last week, rival Valero (VLO.N) , opens new tab reported a lower second-quarter profit but also managed to beat earnings estimates as strong processing volumes offset a slump in margins. On an adjusted basis, Houston-based Phillips 66 earned $2.31 per share for the quarter, beating estimates of $1.98, according to LSEG data. Income from the company's midstream segment rose 23.7%, and increased 15.6% for the chemicals unit. Phillips 66's renewable fuels segment posted a loss of $55 million, compared with a profit of $68 million last year, amid a glut in renewable diesel production capacity in the United States. Sign up here. https://www.reuters.com/business/energy/phillips-66-reports-lower-second-quarter-profit-2024-07-30/