Gilead's Quarterly Profit Surpasses Expectations, Revenue Rises 5%

LOCAL MARKET COMMENTARY

South African markets were closed on Friday due to a public holiday. On Thursday, however, the JSE Top 40 index and the All Share index closed marginally higher, up 0.51% and 0.47%, at 73,728 and 80,739 points, respectively.

EUROPEAN MARKET COMMENTARY

Europe's main index rose on Friday, marking its fourth consecutive session of gains, driven primarily by strength in healthcare stocks. Despite a turbulent week, the index managed to post a small overall gain. On the economic front, German inflation in July increased to 2.6%, as expected, while Italian consumer prices (HICP) dropped by 0.9% from the previous month. The healthcare sector was a top performer, with Nordisk, Europe's largest company by market value, surging 6.3% for its second straight day of gains following a disappointing profit outlook earlier in the week.

US MARKET COMMENTARY

The S&P 500 closed higher on Friday, nearly recovering all its losses from a sharp drop earlier in the week caused by recession fears and the unwinding of a global yen-funded carry trade. Despite these fluctuations, the index was relatively flat for the week. On Thursday, Federal Reserve policymakers indicated that inflation is cooling enough to potentially allow for upcoming rate cuts, with the size and timing depending on future economic data. The Fed is expected to cut rates at its next meeting on September 17-18, but whether the cut will be 25 or 50 basis points remains uncertain.

ASIA MARKET COMMENTARY

Asia-Pacific markets were mostly higher this morning after a volatile week marked by steep sell-offs and a strong recovery, particularly in Japanese stocks. Traders in Asia are focusing on India's upcoming inflation and industrial output data. Economists expect India's year-on-year CPI inflation to drop significantly to 3.65% in July, down from 5.08% in June, while industrial output for June is projected to slightly decrease to 5.5% from 5.9% in May. Additionally, China is set to release retail sales and industrial production figures on Thursday, which are expected to highlight the ongoing economic slowdown, emphasizing the need for further stimulus measures.

COMMODITY MARKET COMMENTARY

Gold prices remained steady this morning as investors awaited key U.S. inflation data later in the week, which will help determine the size of the Federal Reserve's expected interest rate cut next month. Meanwhile, oil prices were largely unchanged in early Asian trading, maintaining most of last week's over 3% gains, driven by geopolitical tensions and improved economic data.

CURRENCY MARKET COMMENTARY

South Africa's rand strengthened on Thursday following U.S. data showing a drop in jobless claims, which eased concerns about a hard landing in the world's largest economy. The dollar eased from a one-week high against other major currencies on Friday, ending a volatile week as traders reacted to a decline in U.S. jobless claims and concerns about a potential economic downturn.

Quilter PLC (QLT) +4.86%

Quilter's performance in the first half of 2024 showed strong growth compared to the same period in 2023. The company’s assets under management and administration (AuMA) increased by 13% to £110.6 billion, with gross flows rising by 35% and net inflows surging by 164%. Reported AuMA also grew by 12%, and net inflows saw a significant increase of 669%. Profit before tax attributable to shareholders more than doubled, rising by 157%, while adjusted profit before tax grew by 28%. The operating margin improved by 5 percentage points to 29%, and the interim dividend per share increased by 13%. Basic earnings per share also saw a notable rise of 150%.

South Ocean Holdings Limited (SOH) +3.52%

As of 30 June 2024, the company's revenue increased by 5.7% to R1.31 billion compared to the same period in 2023. Operating profit showed a slight growth of 1.6%, reaching R68.1 million. However, earnings per share and headline earnings per share both declined by 10% to 21.50 cents. The company did not declare a dividend for this period, but the tangible net asset value rose by 9.7% to R340.4 million.

Gilead Science Inc. (GILD) -2.55%

Gilead Sciences reported a strong second-quarter profit on Thursday, surpassing Wall Street expectations due to lower operating expenses and higher product sales. The company posted a profit of $2.01 per share, excluding items, on revenue of $7 billion, compared to $1.34 per share and $6.6 billion in revenue for the same period last year. Analysts had anticipated a profit of $1.60 per share on $6.72 billion in revenue. Gilead also raised its full-year 2024 adjusted profit forecast to $3.60 to $3.90 per share, up from the previous estimate of $3.45 to $3.85 per share, while maintaining its product sales outlook. Analysts expect 2024 earnings of $3.75 per share on revenue of $27.58 billion.

Solventum Corporation (SOLV) +3.29%

Solventum, the 3M spin-off, reported a significant drop in second-quarter profit, which fell over 70% due to limited sales growth in its wound care and surgical sterilization products, along with increased expenses as the company adjusts to operating independently. Operating expenses rose by about 11% to $1.84 billion, while net income dropped to $89 million, or 51 cents per share, from $321 million, or $1.86 per share, the previous year. Despite flat net sales of $2.08 billion, more than half of which came from its MedSurg business, Solventum raised its adjusted profit forecast for the year to $6.30-$6.50 per share, up from $6.10-$6.40. The company also revised its full-year organic sales outlook to flat to 1% growth, improving from its earlier prediction of flat to a 2% decline. On an adjusted basis, Solventum earned $1.56 per share in the quarter ending June 30.

Do you prefer a full in-depth report you can read offline? Click here to download the full report.