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Trending tickers: Arm, Unilever, British American Tobacco, Maersk

The latest investor updates on stocks that are trending on Thursday

ARM Holdings CEO Rene Haas
ARM Holdings CEO Rene Haas, center, rings the Nasdaq Opening Bell at the Nasdaq MarketSite, during his company's IPO, in New York last September (Richard Drew, Associated Press)

Arm (ARM)

Shares in Arm Holdings were up 25% in pre-market trading on Thursday after the company's third-quarter results topped expectations.

The chip designer saw earnings of $87m in the December quarter compared with $182m in the same period a year prior. Meanwhile, revenue jumped 14% to $824m.

The group also issued fourth-quarter revenue guidance that was better-than-expected at $850-$900m versus the previous $778m estimated.

It said: "The broader semiconductor market is showing signs of recovery, particularly in smartphones, which returned to strong growth in [the third quarter]. “We are only at the beginning.”

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AI was also a factor in its success, with “increasing demand for new technology driven by all things AI.”

Arm also gained market share in the cloud-server and automotive markets, garnering new royalty streams.

Read more: FTSE 100 LIVE: European stocks subdued as China suffers sharp fall in consumer prices

Ben Barringer, technology analyst at Quilter Cheviot, said: "Arm has reported a significant outperformance, attributed largely to the increasing demand for AI in data centres. This has led to a heightened need for high-performance chips in cloud computing, as well as advancements in smartphones equipped with AI functionality.

"As a result of these developments, royalty rates have increased. The transition from version 8 to version 9 has further contributed to these higher royalty rates. The company experienced a 20% increase in its stock value during after-hours trading, indicating strong momentum in AI technology."

Unilever (ULVR.L)

Shares in Unilever rose as much as 3% after the Dove soap maker posted a rise in fourth-quarter sales and launched a €1.5bn (£1.3bn) share buyback program.

The consumer goods firm reported underlying sales growth of 7.0% for 2023 thanks to a 6.8% increase in prices, particularly for its nutrition and ice cream products, and just a marginal 0.2% rise in sales volumes.

Underlying price growth decelerated from 10.7% in the first quarter of last year to 2.8% in the fourth quarter, due to a slowdown in raw material inflation during 2023.

However, the company's new boss said that Unilever's competitiveness “remains disappointing.

Hein Schumacher, chief executive, said: “Today’s results show an improving financial performance, with the return to volume growth and margins rebuilding. However, our competitiveness remains disappointing and overall performance needs to improve. We are working to address this by improving our execution to unlock Unilever’s full potential.”

Schumacher, a former Heinz executive, was appointed to the helm in July, taking over from Alan Jope, a company insider who worked for Unilever for 38 years.

British American Tobacco (BATS.L)

British American Tobacco swung to an annual loss last year after it took a higher-than-expected charge on its US business.

The cigarette and vape company, which owns brands such as Lucky Strike and Dunhill, slumped to a pre-tax loss of £17.1bn in 2023 against profits of £9.3bn the previous year.

It followed a £27.3bn write-down on its US brands, which came in higher than the £25bn hit it warned about in December.

It said the charge was due to its long-term strategy to shift away from traditional cigarettes, as well as lower sales amid wider economic uncertainty and “the growth of illicit single-use vapour products and uncertainty around a potential menthol ban in the US”.

BAT said sales by volume in the global tobacco industry are now expected to fall by around 3% in 2024, but backed its previous guidance for “low single digit” organic revenue and underlying earnings growth for the year.

Meanwhile, the company announced dividend growth of 2% to 235.52 pence, in line with progressive dividend increase approach.

Shares were almost 7% higher in London, climbing to the top of the FTSE 100.

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Tadeu Marroco, chief executive, said: "We are investing to strengthen our US business, accelerate innovation momentum, and enhance capabilities that support our strategic delivery. We expect these investments, together with the US macro-economic pressures, will impact 2024.

"Thereafter, we will progressively build to deliver 3-5% organic revenue, and mid-single digit adjusted organic profit from operations growth by 2026 on a constant currency basis."

Maersk (MAERSK-B.CO)

Shipping company Maersk revealed fourth-quarter profits below expectations on Thursday, stating that 2024 earnings are set to come in well below 2023's level thanks to the crisis in the Red Sea.

It expects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $1bn and $6bn (£790m to £4.8bn) this year, compared with $9.6bn (£7.6bn) last year.

“High uncertainty remains around the duration and degree of the Red Sea disruption with the duration from one quarter to full year reflected in the guidance range,” Maersk said in a statement.

Underlying profits dropped to $839m in the fourth quarter from $6.5bn a year earlier, well below analysts’ expectations of $1.1bn.

Vincent Clerc, CEO of A.P. Moller-Maersk, said: "The current market remains one of robust volumes, but while the Red Sea crisis has caused immediate capacity constraints and a temporary increase in rates, eventually the oversupply in shipping capacity will lead to price pressure and impact our results.

"The ongoing disruptions and market volatility emphasize the need for supply chain resilience, further confirming that Maersk’s path toward integrated logistics is the right choice for our customers to effectively manage these challenges."

It comes after the firm announced 10,000 job cuts in November due to a drop in demand caused by the global economic slowdown.

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