Gilead Q2 beats EPS estimates on strong HIV sales, lifts full-year guidance

South Africa

The Top 40 index added 0.63% yesterday to close the session at 93,305.8 points while the All Share index gained 0.49% to reach 100,643.4 points. President Cyril Ramaphosa’s office confirmed a call with Donald Trump regarding bilateral trade, with formal negotiations to follow amid heightened tensions. U.S. tariffs on South African goods remain at 30%, the highest across Sub-Saharan Africa. In response, the cabinet approved full membership in Afreximbank, enhancing access to $35 billion in trade finance, a strategic move to diversify export markets. Concurrently, government endorsed a 1% levy on diamond companies to fund a global marketing campaign for natural diamonds, as the industry struggles against synthetic alternatives and weak global pricing, compounded by macroeconomic uncertainty and consumer shifts in developed markets.

Europe

European equities posted their largest gain in over two weeks, led by financials on the back of mixed earnings and easing geopolitical tensions. The STOXX 600 rose 0.9%, with banks reaching levels unseen since 2010. Markets were further lifted by news of a potential Trump–Putin meeting, raising hopes for progress in the Russia–Ukraine conflict. However, underlying fragility remains: Rheinmetall shares dropped 8% after disappointing results, and Russia’s budget deficit has already exceeded its annual target by 25%. Meanwhile, a split Bank of England vote on rate cuts—its first since 1997—suggests inflation concerns are still anchoring monetary policy decisions.

United States

U.S. equities were mixed, with the Nasdaq reaching a new high while the Dow and S&P 500 declined, dragged by weak results from Eli Lilly’s weight-loss drug trial. Trump’s announcement of a 100% tariff on semiconductor imports, exempting domestic manufacturers, sent ripples through markets. Labour data showed initial jobless claims rising to 226,000, modestly above forecasts. While rate cut expectations remain high—93.2% probability for a 25bps cut in September—investor focus is shifting to Fed leadership, as Christopher Waller is reportedly Trump’s preferred pick to succeed Jerome Powell. Rising tariffs and central bank uncertainty are key risks for U.S. markets.

Asia

Japanese equities advanced sharply on Friday, buoyed by strong earnings and optimism over potential U.S. tariff relief. In contrast, regional markets fell, with Hong Kong leading losses following a late-session U.S. equity pullback. A Bank of Japan policy summary indicated rising inflationary concerns, with one member suggesting rate hikes by year-end. However, June household spending data disappointed, rising below expectations due to elevated food prices and broader consumer caution. Although core inflation has stayed above the BoJ’s 2% target for over three years, subdued domestic consumption and external trade risks—especially from U.S. tariffs—complicate the monetary tightening outlook.

Currencies

The South African rand was stable on Thursday, supported by firming gold prices driven by renewed safe-haven demand following the implementation of steep U.S. tariffs. Meanwhile, the U.S. dollar strengthened as Fed Governor Christopher Waller emerged as a leading candidate to succeed Jerome Powell. The dollar index climbed 0.18% to 98.36, while the greenback gained slightly against the yen. Currency markets remain highly reactive to trade developments, interest rate speculation, and uncertainty around Federal Reserve leadership. Volatility is expected to persist, with tariff-induced macro risks and divergent central bank policies influencing short-term FX positioning across both developed and emerging markets.

Commodities

Oil prices were flat in Friday’s early Asian session but are poised for their sharpest weekly loss since June, reflecting concerns that fresh U.S. tariffs could dampen global demand. The move follows OPEC+’s decision to fully unwind key production cuts in September—months ahead of schedule—exerting further downward pressure. In contrast, gold reached an all-time high amid flight-to-safety flows, with investors reacting to U.S. trade policy and renewed hopes of Federal Reserve easing. Gold remains on track for a second consecutive weekly gain, with macroeconomic uncertainty and interest rate expectations supporting further upside in the near term.

ADvTECH Limited (ADH) -0.32

ADvTECH, Africa’s leading private education provider, has acquired Regis Runda Academy in Nairobi for KSh1.23 billion (approx. R172 million), further strengthening its Makini Schools portfolio. The school, located in the high-growth Runda area, offers a full K–12 curriculum with capacity for 2,000 students. It will be rebranded as Makini Schools Runda. ADvTECH plans to enhance the campus with AI-driven learning tools and upgraded sports infrastructure. This follows its November 2024 acquisition of Flipper International School in Addis Ababa, Ethiopia, reinforcing ADvTECH’s strategic ambition to lead premium private education provision across key African growth markets.

Foschini Group Limited (TFG) -5.72%

TFG reported robust performance for Q1 FY2026, with Group sales rising 11.5% year-on-year to R14.4 billion. Online sales surged 45.5%, now contributing 14.5% to total retail sales, up from 11.2% in Q1 FY2025, aided by the White Stuff acquisition. In South Africa, TFG Africa achieved online growth of 40.2%, underpinned by continued momentum on the Bash platform. The Group gained 50bps of market share locally, outperforming broader retail sector growth as per Retail Liaison Committee data. The update highlights the Group’s effective omnichannel strategy and continued market share expansion amid a challenging consumer environment.

Montauk Renewables Inc. (MKR) -10.83%

Montauk Renewables reported a 7% year-on-year increase in revenue to $87.7 million for the six months ended 30 June 2025. However, EBITDA declined 27% to $11.4 million, while the company swung to a headline loss of $4 million, compared to $1.6 million in earnings a year earlier. This translated into a loss per share of $0.04 (H1 2024: $0.01 EPS). Headline loss per share was $0.03. Net asset value per share edged down 1% to $1.78. The results reflect ongoing margin pressures despite topline growth, highlighting challenges in scaling profitability across Montauk’s renewable natural gas operations.

Sappi Limited (SAP) -0.96%

Sappi reported Q3 adjusted EBITDA of US$80 million, down significantly due to global economic weakness, soft pricing—especially in dissolving wood pulp (DWP)—and a US$22 million impact from Somerset Mill's PM2 start-up. DWP prices declined US$100/ton to US$800 amid Chinese oversupply and weak fibre markets. Group sales volumes were hit by lower pulp output and delayed production ramp-up. Adjusted EPS swung to a US$0.04 loss (Q3 FY2024: US$0.09 profit). Net debt rose to US$1.95 billion, pushing leverage to 3.2x. While macro uncertainty persists, Sappi remains focused on deleveraging, operational optimisation, and capturing long-term demand in DWP and packaging segments.

Metair Investments Limited (MTA) +6.01%

Metair expects group revenue to rise 52–54% y/y for H1 2025, bolstered by the inclusion of Hesto and AutoZone. EBIT is anticipated at R440–R460 million, up as much as 30%, though margins narrowed to 5.1–5.3%. OEM segment growth was underpinned by improved local vehicle production and Hesto’s performance. The AFM segment saw revenue growth but margin pressure, reflecting AutoZone’s recovery phase. A once-off R300 million capital loss related to Hesto will weigh on EPS. HEPS from continuing operations is guided 6–10% lower. Despite soft consumer demand, Metair remains operationally resilient, with debt restructured and AutoZone integration progressing as planned.

MTN Group Limited (MTN) +5.32%

MTN expects H1 2025 EPS of 495–577 ZAc (H1 2024: -409 ZAc), representing a y/y increase of over 200%, and HEPS of 614–666 ZAc (H1 2024: -256 ZAc), up more than 300%. The strong turnaround is primarily driven by robust operational performance in MTN Nigeria and MTN Ghana. The difference between EPS and HEPS reflects -104 ZAc in impairment losses. Non-operational items in HEPS totalled -12 ZAc. The group’s financial results are due on 18 August 2025. These results mark a sharp recovery from H1 2024’s losses, reinforcing MTN’s resilience and leverage to improving market conditions.

Blue Label Telecoms Limited (BLU) -0.24%

Blue Label expects earnings per share (EPS), headline EPS (HEPS), and core HEPS for FY25 to rise by more than 20% y/y, equating to at least 14.50c, 14.73c, and 15.22c increases, respectively, over FY24. The group has not yet provided specific guidance ranges but confirmed a reasonable degree of certainty in this earnings uplift. A detailed trading statement will follow once exact figures are available. The anticipated growth signals continued operational momentum following prior restructuring and strategic optimisation efforts. Final results for the year ended 31 May 2025 will provide greater clarity on full-year earnings trajectory.

RCL FOODS Limited (RCL) 0.00%

RCL FOODS expects headline earnings per share (HEPS) for the year ended 29 June 2025 to be between 150.0c and 160.0c, reflecting growth of +5.6% to +12.6% compared to 142.1c in FY24. Earnings per share (EPS) is forecast between 175.0c (-4.1%) and 185.0c (+1.4%) versus 182.4c in the prior year. Underlying HEPS from continuing operations is anticipated to increase by 9.6% to 17.5%, ranging from 140.0c to 150.0c. Growth moderation in H2 was driven by sugar imports impacting volumes and lower global sugar prices, while Groceries and Baking segments performed well. Final results are due 1 September 2025.

Gilead Sciences Inc. (GILD) 0.00%

Gilead Sciences delivered stable Q2 results, with adjusted EPS of $2.01 slightly exceeding consensus of $1.97, supported by robust HIV sales. Total revenue rose 2% to $7.1 billion, meeting expectations. HIV treatments generated $5.1 billion, up 7% year-on-year, while cell therapy sales fell 7% amid heightened competition. Cancer drug Trodelvy posted 14% growth to $364 million. Liver disease product sales declined 4%, mainly from reduced hepatitis C revenue. The company raised its full-year adjusted EPS guidance to $7.95–$8.25 and upgraded 2025 product sales projections to $28.3–$28.7 billion. Results reinforce the company’s resilience amid evolving therapeutic market dynamics.

Pinterest Inc. (PINS) +0.18%

Pinterest reported mixed Q2 results, with adjusted EPS of $0.33 missing estimates of $0.35, overshadowing solid revenue and user growth. Revenue rose 17% year-on-year to $998.2 million, ahead of the $974.8 million forecast. However, shares dropped over 11% in after-hours trading. Despite MAUs growing 11% to 578 million—beating expectations—user growth slowed sequentially. Ad pricing fell 25% year-on-year, due to a higher proportion of international impressions where CPMs are lower. Third-party ad partnerships with Google, Amazon, and Magnite continue to underpin monetisation. Pinterest guided Q3 revenue between $1.03 billion and $1.05 billion, broadly in line with market expectations.

Warner Bros Discovery Inc. (WBD) -7.38%

Warner Bros Discovery reported a surprise Q2 profit of $0.63 per share versus consensus expectations of a $0.21 loss. Revenue reached $9.81 billion, surpassing the $9.76 billion estimate, as strong box office performance—including “A Minecraft Movie”—and international HBO Max expansion drove growth. The streaming segment added 3.4 million subscribers, beating Visible Alpha’s 2.71 million forecast, with notable traction in Australia. Streaming posted a $293 million adjusted core profit, reversing a $107 million loss a year earlier. While studio revenue surged 55%, the firm warned of softer Q3 TV ad sales amid a lighter sports calendar and reduced CNN political coverage.

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