Philips Up, Schaeffler Drops, Lufthansa Gains

0:02 Bloomberg Audio Studios.

0:04 Podcasts. Radio.

0:06 News.

0:08 The Stock Movers Report. Your roundup of companies making moves in the stock market. Harnessing the power of Bloomberg data.

0:16 Let's take a moment to look at some of the stocks on the move today in Europe. I'm Tiwa Adebayo with Caroline Hepke. And we're joined in studio by Bloomberg's breaking news editor, Louise Moon. Louise, let's start with Philips, the Dutch medical devices maker. Shares rising today.

0:32 What is driving that? So, they had a bit of a double whammy of good news.

0:35 So, firstly, third quarter results, better than expected profitability. That's driven by higher sales, tighter cost controls. And then the second bit of good news for them is that they've reached an agreement in principle with the U.S. Justice Department. That's over faulty sleep apnea devices and ventilators. This has been quite a long-awaited settlement of the probe. A recall happened in 2021, and it's hammered Philips' valuation ever since. So, there's optimism now that this kind of long-running scandal is nearing an end.

1:09 So, Philips has said they put aside a provision of € 288 million.

1:13 And that is expected to be paid in early 2027, early next year. And let's just say that is larger than thought. But overall, it's a milestone and a positive milestone. So, shares rose as much as about 7% initially in morning trading. And then they paired some gains, but they're still up about 4%.

1:28 Okay.

1:29 So, on Philips, also, a supplier to VW has announced thousands of job cuts.

1:36 It's got a lot of attention today.

1:38 Yeah.

1:38 So, this is Scheffler in Germany.

1:39 So, they're cutting 3,460 jobs in Europe, most of those in Germany and its home country, about three quarters there. They're also closing five sites in Europe. Again, mostly in Germany, four in Germany and one in Belgium. Some of their top executives are giving up about 10% of their base salary as well.

1:57 All of this to produce savings.

1:59 That's expected to yield about £ 300.

2:01 Million in annual savings from 2030.

2:04 They're saying this is in response to this persistent downturn that we've been seeing in the car industry and it's impacting them given that they are car component suppliers, as well as high costs in Germany.

2:18 So, yeah, I mean, the car industry has been facing a lot of headwinds.

2:20 They've had weaker demand, rising competition from China, this slower transition than expected to electric vehicles. And that's hitting it across the board. For Scheffler, it's not great timing. This comes just weeks after they finished an earlier restructuring program. And Bloomberg Intelligence is saying that this does help, that these cost cuts will help them reach their targets for their margins, but still shares fell, I guess, as you could expect, they fell over about 3% in morning trading.

2:52 And sticking with Germany, we've got airline Lufthansa. It's gaining today. And that is despite higher fuel bills that we're seeing across the industry, Louise. Yeah.

3:01 So, they've lowered their profit outlook for the year. And as you say, that's based on higher fuel costs. So, they're expecting their full year fuel bill to rise by about € 2 billion. That's higher than they had expected before. This is their second guidance report. cut or revision in three months. So, earlier this year or early this year, they had expected earnings to be significantly above last year and then that's gradually changed.

3:27 On the back of all these.

3:29 Wider ways we've been seeing in the airline industry, we had relatively similar commentary yesterday from Ryanair as well.

3:34 As you say, though, shares did rise.

3:35 I'm just saying that profit revision was widely expected. So, they're focusing instead on the third quarter earnings that came today, which were actually relatively positive. They were slightly better than expected in terms of profitability. So, that's been the focus and that's what's moving the shares in trading.

3:54 The Stock Movers Report from Bloomberg Radio. Check back with us throughout the day for the latest roundup of companies making news on Wall Street. And for the latest market-moving headlines, listen to Bloomberg Radio Live. Catch us on YouTube, Bloomberg.com, and on Apple CarPlay and Android Auto with the Bloomberg Business app.