WH Smith Under Regulatory Pressure Amid Investigation
"So WH Smith is facing a probe. So WH Smith is having a real tough time at the moment. We remember of course the accounting error from a few months back where it revealed that it had overstated its result in the North American business by 30 million pounds. And since then that has triggered a bunch of setbacks for the company. We've seen shares plunging, they've had to delay their results twice, they've had to cut their outlook twice as well, and the CEO resigned. And today there's obviously yet another setback with the financial regulator in the UK, the FCA, opening an investigation into the company. And the FCA can take enforcement actions when companies have misleading public announcements."
WH Smith is currently facing significant setbacks including an FCA investigation, dividend cuts, and delayed results following an earlier accounting error. These issues, combined with management upheaval, have led to a steep decline in share price and raised serious concerns about the company's credibility.
WH Smith Under FCA Probe and Dividend Cut Weighs on Stock
"So, WHM have confirmed this morning that they're under investigation by the FCA. So, that's obviously the financial regulator um here in London. They had a probe that um that Deote uh implemented in November and found a lack of oversight for Joe B. Smith which led to the CEO resigning. The stock has slumped and, well year to date, they're down over about 40% with added losses today, possibly heading for its worst year on record."
WH Smith is under FCA investigation amid an accounting-era probe and has cut dividends for the first time since the pandemic, with its stock down over 40% year-to-date. These developments raise significant concerns about the company's credibility and outlook.
Siemens Under Pressure from Currency Headwinds and Mixed Guidance
"So for Merc meanwhile we are seeing a drop for Seammens. What are the main challenges that they've been talking about? Yeah, so a lot to digest from Seammens this morning. So it actually set some near and medium-term targets. It also announced a kind of a broader revamp that includes trimming its stake in Seammens Health and Ears, which is the medical equipment unit that was spun off in 2018. And the goal of that is to free up capital and invest more in AI and software. And so analysts have said that that deconsolidation makes a lot of sense, that it's a logical step to simplify the group given that there's very little synergy between Health and Ears which makes MRI scanners and then Seammens which makes, you know, software for factories. So, you know, those are two very different things. But overall the results and the outlook disappointed a little bit. And we had JP Morgan analysts calling the results quite mixed saying that there's pressure on margin. There's currency headwinds really hurting the business as well. And that the medium-term guidance is actually quite opaque. It seems the company said that it expects those currency fluctuations to strongly burden profit and sales growth in 2026. So that clouds the outlook a little and we saw that reflected in shares a little bit weaker this morning as a result."
The segment covers the challenges facing Siemens (referred to as Seammens) including a revamp strategy that involves divesting non-core units to free up capital, mixed results, and significant headwinds from currency fluctuations that are expected to impact profit and sales growth in 2026. Analysts have flagged margin pressure and opaque medium-term guidance, contributing to a weaker share performance.
Swedish Telecom Operator Ericsson Shows Robust Performance
"Yes, Erikson, obviously the the Swedish telecoms group. Their shares were up last time I looked over 13%. So that's the most since April, back to levels last seen in February. That's after their third quarter results. Essentially, they beat estimates uh across the board. And analysts are saying that they're impressed by what they're calling robust profitability and they particularly note the good margin. So essentially that Erikson is operating well in what is quite a tough environment at the moment in the telecom space."
Louise Moon details how Ericsson (referred to as Erikson) exceeded Q3 estimates with robust profitability and good margins. Despite a tough telecom environment, cost cutting and operational efficiencies have helped the company's performance, reflected in a significant share price jump.
Strong Q3 Turnaround for Ericsson
"so it reported this morning a big jump in third quarter profit and a lot of that had to do with the sale of its core routing business I connective. Um it also said that the margins were healthy so that the gross margin forecast came in ahead of expectations and then in addition to that it also signed a 5-year programmable network deal with Vodafone. So that was another boost as well. So analysts said this was a quarter of strong profitability and that despite end markets being quite tough for Ericson it was able to kind of execute strongly in that environment."
Ericsson posted a robust Q3 performance driven by the sale of its core routing business and a strategic 5-year programmable network deal with Vodafone, leading to healthy margins and an improved gross margin forecast amid a challenging market environment.