Shell, WPP Plummets, Volkswagen Gains

On this episode of Stock Movers:
- Shell posted 3Q profit that beat analyst estimates, helped by a rebound in performance by its oil and gas traders even as weaker energy prices weighed on earnings.
- WPP shares hit their lowest level since 2008 after it cut its revenue growth guidance for the year. New CEO Cindy Rose said the company needs to simplify its offer to clients.
- Volkswagen shares rose after free cash flow and margin came in strong. The carmaker warned about shortages of Nexperia chips, but said it secured enough components for the coming week to keep its German plants running.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News, The.

Speaker 2 (00:08):
Stock Mover's Report, your roundup of companies making moves in
the stock market, harnessing the power of Bloomberg data.

Speaker 3 (00:16):
Let's take a look at some stocks on the move
today in your I'm Tom McKenzie alongside Stephen Carroll. We
are joined by Bloomberg reporter Chloe Mellie Chloe. We start
with Shell third caught a profit better than expected at
a time of weaker oil prices. What's going on?

Speaker 1 (00:29):
Yeah, So, as you said, weaker energy prices that dragged
down and a little bit we saw that with Equinoy yesterday.
But what was helped for Shell was that there was
a rebound in performance by its oil and gas traders.
So last month Shell had already said that oil and
gas trading profits had actually recovered, and that was after
Shall and also a lot of its peers that really

(00:50):
struggled to navigate the really sharp market swings that we
saw over the second quarter that were of course driven
by a lot of geopolitical uncertainty. Shall also in the
pace of share buy bags, which is something that investors
care a lot about when it comes to those oil majors,
and that really reassured the market. It seems that the
overall the CEO's strategy has been working out quite well

(01:11):
for Shell. He's been spending the past couple of years
cutting costs and getting rid of underperforming assets to try
and close that valuation gap with US rivals, and so
far that seems to be working quite well. Our shares
are up sixteen percent since the start of twenty twenty
five and outperforming it's peers. So everything is going quite
well for SHALL so far. We'll see how BP actually

(01:33):
does next week.

Speaker 4 (01:34):
Yeah, inde chall share is just down half of one
percent this morning in London. The big share move though
on the London market has been WPP, currently down around
ten percent, but the hit shares hit. They're lower since
two thousand and eight earlier as well. What's driving those
shares lower this morning.

Speaker 1 (01:49):
Well, it cut it's sales guidance and that is something
that I had already done in July, so this is
now the second cut this year. And they also announced
that it would revamp its entire structure to try and
become more efficient. So this is the first set of
results under the new CEO, Cindy Rose, who started just
last month on September the first, and she's now got
quite a massive, massive task ahead of her. She needs

(02:11):
to make some really big changes to kind of reverse
what has been a very weak performance for a while
for WPP. It's fallen way behind its big rival, Publicist,
which actually upgraded guidance this season, so we can see
how we've got two very diverging paths there, and it's
also seen the loss of some really major accounts for
the WPP. So now Rose is having to kind of

(02:32):
adapt the agency to a new environment where AI tools
are really changing the advertising world. And we've also seen
a lot of reduced client spending on marketing because of
macroeconomic uncertainty. So a CEO called the recent performance unacceptable
and she said she'd have to make really big changes,
and now we'll announce that plan in the new year,
so we'll see how that goes.

Speaker 3 (02:53):
Okay, So from advertising to the auto makers and geopolitics
hitting the German giant Volkswagen.

Speaker 1 (03:00):
Yeah, so Volkswagen said that it would need a sufficient
supply of semiconductors to be able to meet its financial
targets for twenty twenty five. So that's all related to
this whole experior at debacle, so it's a really clear
signal that the shortage of chips from an experior is
having a major impact on those European carmakers. Volkswagen said
that it had secured enough components for the coming week

(03:21):
to keep the German production plants running, but that it
couldn't rule out disruption to production beyond at that time,
so that's obviously a big negative. But actually shares did
gain this morning because there was a really strong free
cash flow and really strong margin in the earning, so
as some anlist said that that really sets the stage
for a potential reset in twenty twenty six, which echoes

(03:41):
what we had from Mercedes yesterday with the shares rising
because investors were expecting the worst to kind of be behind.
So it seems to be maybe the light of the
end of the tunnel for their European car sector.

Speaker 2 (03:53):
The Stock Mover's report from Bloomberg Radio. Check back with
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