Reuters Insider - Reuters Today: Rio Tinto offers dividend weak earnings
03/08/2016 10:42
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Description: Mining giant Rio Tinto under pressure with weaker
conditions for the commodity sector reporting
weakest results in 12 years. European banks
continue to struggle on economic conditions and
low growth.
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Transcript (May be auto-generated)
Good morning and welcome to Reuters Today. I'm Maryam Behmard. A disappointing
day for Rio Tinto. The global mining giant, released its weakest first-half
earnings in 12 years, but still managed to beat forecasts with its
higher-than-expected dividend. Despite revenues plummeting 47% on weaker iron
ore and copper prices, the miner still surprised investors by offering a half
year dividend of 45 cents a share. That's a stark contrast to rivals Anglo
American, and Brazil's Vale that said there would be no dividends with results
last week. Now Rio Tinto Q2 earnings fell to a little over $1.5 billion from
almost $3 billion a year earlier. Despite the higher numbers we're seeing in the
markets, top lender HSBC reported Q2 earnings falling almost 30%. That's lower
than expectations. Of course, off the back of revenues being hit hard by
economic growth losing steam, especially in its key markets - Britain and Hong
Kong. And in fact, the London and Hong Kong-based lender plans to buy back about
$2.5 billion in shares in the second half. Pre-tax profit down almost $4 billion
to a little under $10 billion so far this year - yet another sign that the
banking sector as a whole is very much struggling to cope with slower growth and
political fallouts. Now let's take a look at how HSBC and other stocks on the
radar today performing. That share buyback cheering investors on the, of course,
back of what really were disappointing results. The London- and Hong Kong-based
bank also choosing to maintain current dividend levels for the foreseeable
future. RBS though keeping an eye on that. Royal Bank of Scotland as well, with
rumblings that Banco Santander has made an offer to take over the indebted
lender. We'll have more on that as it develops. And finally, one of Britain's
biggest clothing retailers, NEXT, warning today that its sales for this year
could fall by 2.5% despite a better-than-expected 0.3% rise in full price sales,
saying that demand remains weak and the impact from Britain's vote to leave the
EU is still unclear for the retail sector and of course overall sales. Let's
turn now to the markets to see how we stand in early trade. The FTSE 100 is
lower at the moment by about 0.1% while the FTSEurofirst 300 still under
pressure, down also about 0.1%. Overall, European stocks seeing a bit of an
uptick today with banks putting in a rare day of outperformance despite those
poor numbers from HSBC; that is, shares are up more than 3%. Similar deal for
SocGen and Credit Agricole. ING Group is one that's standing out today. The
Dutch financial heavy-weight reporting a 27% jump in net earnings for Q2, off
the back of strong lending growth. That's of course a stark contrast to many
other European lenders in the region. ING said underlying net earnings came in
at about EUR1.4 billion thanks to growth in its core lending. Many investors are
keen to see how the financial firm has helped boost lending at a time when other
lenders are failing to ignite the same demand. ING hasn't given an outlook for
the year but the Chief Executive Officer has warned that the economic conditions
will remain difficult. That's it for now. I'm Maryam Behmard and this is
Reuters