The Chart Show: BP, JD Wetherspoon, Flutter

TL;DR

BP beat first-quarter profit forecasts and raised its buyback, while JD Wetherspoon struggled with weak sales and Flutter’s US growth was offset by declines elsewhere. BP posted $6.2 billion in underlying replacement cost profit, Wetherspoon’s like-for-like sales remained 4% below 2019, and Flutter’s US sales rose 45%. Read on for the companies’ results, pressures, and key chart levels.

Transcript

hello and welcome to the chart show i'm victoria scholar and this week's three charts are bp jd weatherspoon and flutter shares mbp rallied on tuesday after it reported underlying replacement cost profit in the first quarter of 6.2 billion dollars that's ahead of forecasts for four and a half billion dollars and the highest level in over 10 years i... Read More

Key Insights

• 🫥 BP's strong profits reflect the benefits it gained from the sharp rally in crude prices during Q1 2023, but the cost of exiting operations in Russia has impacted its bottom line.
• 🐢 JD Weatherspoon's aim to break even is hindered by slow sales recovery and increasing input costs, making profitability a major challenge.
• 😀 Flutter's revenue growth in the US is offset by declining revenue outside of the US, as it faces regulatory headwinds and post-pandemic demand lull in other markets.
• 😀 The challenges faced by BP, JD Weatherspoon, and Flutter highlight the macro uncertainties and the ongoing cost of living crisis, impacting their respective industries.
• 🤙 Investors are still assessing BP's profits against the cost of exiting Russia, while renewed calls for a windfall tax on energy giants like BP are being made.
• 🫒 JD Weatherspoon's struggles reflect the tight household budgets and limited discretionary spending due to the cost of living crisis.
• 🌍 Flutter's stock performance is influenced by the contrasting growth in the US market and challenges in other international markets.

Questions & Answers

Q: How did BP perform in the first quarter?

BP reported underlying replacement cost profit of $6.2 billion, ahead of the $4.5 billion forecast and its highest level in over 10 years. Surplus cash flow reached $4 billion, allowing BP to increase its share buyback program to $2.5 billion.

Q: How did BP's exit from Russia affect its results?

BP faced a $24 billion charge related to leaving Russia, including abandoning its nearly 20% stake in Rosneft. Investors were weighing its strong profit against the exit from operations that had accounted for 3% of its cash flow in the previous year.

Q: What levels were important on BP's share chart?

BP shares had followed an ascending trend line since their October 2021 lows, although the price peaked in February. The key level was 400, with continued trading above it potentially supporting a move toward the recent high and next resistance around 418.

Q: Why was JD Wetherspoon expecting only to break even?

JD Wetherspoon was struggling to restore sales to pre-pandemic levels as weaker demand made profitability difficult. Tight household budgets, rising food, drink, and energy costs, and a VAT increase on food and non-alcoholic drinks added further pressure.

Q: How were JD Wetherspoon's sales and shares performing?

Like-for-like sales for the 13 weeks to April 24 were 4% below the same period in 2019. Its shares were down more than 45% over 12 months and were approaching support near their March 2020 lows.

Q: What did JD Wetherspoon's chart suggest?

The shares had been forming lower lows and lower highs after recovering more than 75% of their 2020 losses. The price fell below 800, with 700 identified as the next psychological support level; a break beneath it could open the way to further declines.

Q: What drove Flutter's first-quarter revenue growth?

Flutter delivered 6% revenue growth, supported by a 15% increase in average monthly players and a 45% rise in US sales. The results sent its shares to the top of the FTSE 100 on Wednesday morning.

Q: What challenges did Flutter face outside the US?

Revenue outside the US declined 3% because of safer-gambling measures and regulatory headwinds. Macro uncertainty, the cost-of-living crisis, and weaker post-pandemic demand also challenged the business, while its shares were down more than 25% for the year.

Summary & Key Takeaways

• BP reported higher-than-expected underlying replacement cost profit for Q1 2023, reaching $6.2 billion, the highest level in over 10 years. However, the company faced a $24 billion charge from exiting operations in Russia, impacting its bottom line.

• JD Weatherspoon expects to break even in the current fiscal year, but sales have been slow to recover. Rising input costs, including food, drink, energy prices, and a recent VAT increase, pose challenges for the pub chain.

• Flutter experienced revenue growth driven by increased players and sales in the US, but outside the US, revenue declined due to safer gambling regulations. Macro uncertainties and the post-pandemic lull in demand continue to challenge the business.