BUSINESS LIVE: AstraZeneca raises earnings expectations; Sales of BATS vapors are increasing; Unilever welcomes volume growth

According to two separate reports, the housing market is heating up and more people are looking to buy or sell.

The latest research from the Royal Institution of Chartered Surveyors (Rics) shows that estate agents and surveyors are seeing more and more inquiries from buyers and more sellers are entering the market.

London-listed shares are trading higher this morning, with the FTSE 100 supported by a string of positive results from industry giants such as Unilever and British American Tobacco, while industrial metal miners climb on a softer dollar.

Unilever shares rose 3.1 percent after soap maker Dove reported a fourth-quarter sales increase and launched a $1.6 billion share buyback program.

The broader personal care, drugstore and supermarket index rose 1.7 percent on the news, which was the biggest sector gain.

British American Tobacco has risen 4.6 percent to the top of the FTSE 100 after the Dunhill maker forecast organic sales growth in the low single digits for 2024 and a full-year profit gain.

Shares of catering group Compass rose 2.5 percent thanks to an increase in organic sales in the first quarter and better-than-expected like-for-like volume.

Shares in Snap fell by more than a third yesterday as the company struggles with an advertising slowdown, leaving founder Evan Spiegel and his wife Miranda Kerr with a £200 million loss.

The social media giant saw its shares fall 35 percent after Wall Street grew frustrated with its latest quarterly results.

Uber has posted its first ever full-year profit as demand for its taxis soars.

The San Francisco-based company reported a profit of £870 million for 2023 – after a £1.4 billion loss the year before.

Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club:

‘Unilever’s performance in 2023 was uninspiring, with notable weakness in Europe and ice cream, partly driven by market share losses from private label competition.

‘Unilever’s new CEO, Hein Schumacher, recognizes that the group could and should do better. Its ‘Action Plan’ is designed to reinvigorate performance through more impactful innovation, productivity savings and improved culture, with an increased focus on the top 30 Power Brands.

‘The success of this action plan is still too early to judge, but investors should not expect quick solutions. The plan is not just about reducing costs and increasing efficiency. It is designed to make Unilever a more innovative company, with stronger, faster growing brands. This will require more branding and marketing investment, and will not be achieved quickly or easily.

‘Overall, there is much to like about the action plan of the new CEO, Hein Schumacher. But it is difficult to avoid the conclusion that the environment for Unilever and its peers has become much more difficult in recent years.

‘Cost of living challenges mean private label brands have never been more attractive, meaning Unilever must work harder to maintain, let alone grow, market share. It feels like this action plan has more substance than past initiatives, but it must succeed to prevent the company from declining.”

Summer Colling, healthcare analyst at Citeline:

“AstraZeneca’s solid fiscal 2023 revenue numbers of $45.8 billion are in line with, albeit slightly lower than, Evaluate’s estimate of $46.8 billion.

‘As expected, sales in the fourth quarter of 2023 were driven by the company’s oncology assets Tagrisso, Imfinzi and Lynparza, its diabetes assets Farxiga and sales of Ultomiris in the rare disease market, all of which helped offset the declining sales of AstraZeneca’s COVID-19 drugs .

‘Tagrisso remains the company’s leading oncology product, with sales of $5.8 billion in fiscal 2023, also in line with Evaluate’s estimate of $5.9 billion. Tagrisso’s RoW sales in the fourth quarter were negatively impacted by the recent reclassification of rebates from the Australian government and continue to be impacted by the mandatory price reduction in Japan.

‘As expected, Imfinzi’s sales in China were boosted by the new launch in bile duct cancer, which helped offset the effect of the central government’s anti-transplant campaign.

‘Sales of Farxiga in Europe do not appear to have been affected by the EMA’s recent recommendation to update the product information for diabetes medicines containing dapagliflozin to reflect the risk of vulvovaginitis, balanitis and related genital infections.’

Unilever met expectations for underlying quarterly sales growth in 2023, after the consumer goods giant raised prices at a slower pace and posted the first increase in sales volumes in ten quarters.

The company said it expects “modest improvement” in underlying operating margin for the full year, and that underlying revenue growth will be within the multi-year range of 3 to 5 percent.

Boss Hein Schumacher said: Today’s results show an improving financial performance, with a return to volume growth and recovery in margins. However, our competitive position remains disappointing and overall performance needs to improve.

“We are working to address this by improving our execution to unlock Unilever’s full potential.

“In October, we created a growth action plan focused on three priorities: delivering higher quality growth, increasing productivity and simplicity, and adopting a strong performance focus.

‘The new leadership team has quickly anchored the action plan. We have increased investments in our 30 Power Brands, accelerated portfolio transformation and are pursuing a sharper performance focus with clear and far-reaching objectives across the organization.

“We are in the early stages of this work and there is still much to do, but we are working with speed and urgency to transform Unilever into a consistently outperforming company.”

British American Tobacco has forecast organic sales growth in the low single digits for the coming year as declining smoking rates in the US weigh on double-digit gains in its ‘new category’ segment, which includes products such as vapes.

The maker of Dunhill and Lucky Strike cigarettes reported a 5.2 percent rise in full-year profit for 2023, beating analyst expectations.

CEO Teadeu Marroco said its plans to revive performance in the US were showing early signs of progress and the company was investing further.

“We expect these investments, together with US macroeconomic pressures, to have an impact through 2024,” he said.

Germany cemented its status as “Europe’s sick man” as its once-mighty industrial sector suffered its longest recession since the aftermath of reunification three decades ago.

Europe’s largest economy and former powerhouse said official data showed output fell a further 1.6 percent in December.

AstraZeneca expects higher revenues and profits in 2024, with the drugmaker betting on strong uptake of its RSV vaccine for young children and resilient demand for drugs against cancer and rare blood diseases.

Strong sales of AstraZeneca’s cancer treatments and rare disease drugs, coupled with resilient demand in emerging markets, have fueled growth since then.

The London-listed company said it expects total revenue and core earnings per share (EPS) to rise in the low double digits to low teens this year.

For 2023, AstraZeneca reported revenues of $45.81 billion and core earnings per share of $7.26.

For the fourth quarter, it reported core earnings per share of $1.45 on total revenue of $12.02 billion, compared with forecasts of earnings of $1.50 per share on revenue of $12.01 billion.