Yahoo Finance What to watch: Ryanair profit warning, Oxford bans Huawei, and Sophos shares dive
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Ryanair’s second profit warning
Ryanair (RYA.L) has warned over profits as the budget airline counts the cost of lower than expected airfares over winter.
The Irish carrier on Friday lowered its full-year post-tax profit guidance from between €1.1bn to €1.2bn to a new range of €1bn to €1.1bn. It is the airline’s second profit warning in three months.
Ryanair boss Michael O’Leary said: “There is short haul over-capacity in Europe this winter, but Ryanair continues to pursue our price passive/load factor active strategy to the benefit of our customers who are enjoying record lower air fares.
He added: “We cannot rule out further cuts to air fares and/or slightly lower full-year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March.”
Ryanair shares were down by 2%.
Oxford bans Huawei
Oxford University has banned Chinese telecoms company Huawei from making donations to the university, according to multiple reports.
Reuters reports that Oxford said on Thursday it “will not pursue new funding opportunities with Huawei Technologies Co Ltd or its related group companies at present.”
“The decision has been taken in the light of public concerns raised in recent months surrounding UK partnerships with Huawei. We hope these matters can be resolved shortly,” the statement said.
Huawei has been facing global pressure over possible links between the company and the Chinese state. There are fears its telecoms infrastructure could be being used for spying.
Separately on Friday, the BBC reported that Germany is considering a ban on Huawei being involved in its 5G infrastructure.
Huawei has denied the spying allegations in the past. A Huawei spokesman told Reuters the company had not been informed of the Oxford decision and only found out when it was reported in the media.
Retail sales worse than expected
Retail sales fell by 0.9% month-on-month in December, the Office for National Statistics said on Friday.
The decline was worse than forecast. Economists had been expecting a 0.8% fall in sales.
The ONS said “all sectors except food stores and fuel stores declined on the month.”
Online shopping performed strong despite the overall slowdown. E-commerce accounted for 20% of all retail in December and grew by 13.6% compared to the same month a year earlier.
Sophos shares tumble 25%
Shares in cyber security company Sophos (SOPH.L) tumbled by 25% after the company warned of “continued subdued performance” on Friday.
Sophos said billings grew by 2% in the third quarter but reported “a modest decline in billings from new customers as well as a decline in hardware billings.”
It added: “We now expect the trends in the third quarter to generally continue into the fourth quarter, which would result in a modest decline in full-year constant currency billings.”
Lord Mayor: Embrace crypto
The Lord Mayor of London believes the UK should embrace cryptocurrency and related technologies to help power future economic growth.
“Fundamentally, it’s a nascent technology,” Peter Estlin told Yahoo Finance UK in a recent interview. “It’s got some bad raps associated with things like bitcoin. But there is a fundamental value in that innovation — blockchains etc.
“I think we need to embrace it, I think we are embracing it but perhaps with a degree of caution, ensuring we understand it.”
European markets
European stock markets were higher, buoyed by reports that US treasury secretary Steven Mnuchin floated the idea of pre-emptively lifting Chinese tariffs in a bid to thaw relations between the two countries.
Britain’s FTSE 100 (^FTSE) was up by 0.8%, Germany’s DAX (^GDAXI) was up by 0.8%, France’s CAC 40 (^FCHI) was 1% higher, and the Euronext 100 (^N100) was up by 1%.
Asian markets were also buoyed by the Mnuchin reports. Japan’s Nikkei 225 (^N225) closed up by 1.2%, Hong Kong’s Hang Seng index (^HSI) was up by 1.2%, and China’s benchmark Shanghai Composite (000001.SS) was 1.4% higher.
What to expect in the US
US stock futures were pointing to a quiet open. S&P 500 futures (ES=F) were up by 0.2%, Dow Jones Industrial Average futures (YM=F) were up by 0.3%, and Nasdaq futures (NQ=F) were up by 0.3%. The VIX volatility-tracking index (^VIX) was down by 6%.
