Lloyds Falls, Rolls-Royce Backs Outlook, GN Store Drops

On this episode of Stock Movers:
- Lloyds shares fall as much as 2.4% after the lender’s earnings came in a touch shy of expectations. Analysts blamed higher severance costs, but said that overall trends are supportive with Lloyds maintaining its full-year guidance.
- GN Store slumps as much as 10% after lowering its full-year guidance to account for the impact of US tariffs.
- Rolls-Royce expressed confidence the aircraft engine supplier can meet its financial goals for the year despite the uncertainty caused by the introduction of new tariffs.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news, The.

Speaker 2 (00:08):
Stock Movers podcast, your roundup of companies making moves in
the stock market, harnessing the power of Bloomberg Data.

Speaker 1 (00:17):
Let's take a look at some of the stocks on
the move today in Europe. We're joined for that Buy
our Markets Today Editor Sam Onsted, Sam, good morning. Just
the UK to talk about today is that the European
markets are all closed. Let's start with the results out
of Lloyd's.

Speaker 3 (00:29):
Yeah, so, I think for the most part what people
were watching for, particularly with Lloyd's was the motor finance
probe in the UK. No great update on that. You know,
we're in the midst of that of new judgments being
made there, so they're going to have to wait to
see if they have to put any more money aside
for that. Two though interesting dynamics in there. Costs were
a little bit higher than expected. That was almost entirely
because of the frontloading of severance payments, so people being

(00:51):
laid off by Lloyd's, they frontloaded those to the first quarter,
so their cost will go down as the year goes on,
but it's hit profit in the first quarter of the year.
And then the other thing is that they have put
a side not one hundred million pounds, because they've slightly
tweaked their economic forecasts and that's to cover the potential
hit from tariffs for the UK economy over the course
of the next year. So you could say, only one
hundred million pounds at the moment, not an enormous impairment

(01:13):
to take, but you know, not a great sign for
the way that they think the economy is going to look.

Speaker 4 (01:18):
It's an impairment that wouldn't have been there pre April
and pre so called Liberation Day. So the tariff impact
being factored in by UK Bank. Lloyd's more on tariffs
because one of the worst hit corporate victims is also
in focus for you today, Gen store Nord. What's the
story there, Sam.

Speaker 3 (01:35):
Yeah, so I mentioned you know, the UK is open today.
Denmark is the only other major European market that is
open today. Gen store Nord hearing aids. They have taken
a pretty significant tariff hit. So some of this had
already been priced in because there was an expectation that
they would take a hit because of parts moving over
and the US obviously being a major market for all
healthcare companies. But it's really slammed them kind of across

(01:58):
the board. You know, their guidance has been effectively pulled.
We've seen that from a couple of other companies, but
this is another one to add to the list, and
their shares falling a little bit in Copenhagen today on that,
but maybe not as much as may have been anticipated,
because some of this has already been priced in by
the volatility over the course of April.

Speaker 1 (02:14):
Rolls Royce meanwhile saying it can power through the tariff chaos.

Speaker 3 (02:19):
Yes, so, genstore Lord particularly poor, but actually, for the
most part, a lot of big companies, there's a lot
of uncertainty in their outlooks. So a lot of them
are saying that we you know, we can't totally predict
what's going to happen over the course of the next year.
But most of them appear to be fairly sanguine about
their ability to actually manage these costs. Rolls Royce a
company with huge supply chain parts, you know, coming from

(02:40):
all over the world. They feel as though they've already
done enough to mitigate in the lead up to the
reciprocal tarif announcement in April, that they should be able
to manage the effects over the course of the year.
Remember Rolls Royce one of the top performing stocks in
London over the course of the last couple of years
and rising again today.

Speaker 4 (02:56):
Sam, if we just take a beat this Thursday, so
many of the earnings have come through more to comic
coal stateside with the focus on tech. What for you
been some of the key takeaways in the context of
this global trade war?

Speaker 3 (03:07):
I mean, I think the really key thing you coming
into this, I think there was an expectation that you
might see what you saw at the beginning of the pandemic,
where guidance is just being pulled almost across the board
because there's so much uncertainty. Rather than the guidance being pulled,
I think what you're seeing is companies instead taking a
kind of a bit more of a wait and see approach,
lots of uncertainty to I think if you go through

(03:28):
earnings reports over the course of the last couple of
months into a search for uncertainty, you will find thousands
and thousands of mentions of it. That's been more the
dominant theme rather than actually kind of pulling guidance in
the way that we saw at the beginning of the pandemic,
but uncertainty, I would say, is raining.

Speaker 2 (03:44):
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Speaker 3 (04:08):
Mm hmm