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Well, let's take a look at some stocks on the move today in Europe. I'm Stephen Carroll with Lizzie Burdon, and we're joined by Bloomberg reporter Chloe Malet.
Chloe, good morning.
Let's start with the big jump then in Ericson's shares. What's driving the games?
Well, Ericson really delighted investors today with both a really big beat on earnings and then also its first ever buyback. So this is really good news for the company given that it has struggled a little bit recently, just like other makers of telecom equipment, and that is because demand has been very weak from operators. You did not spend as much on five G upgrades as expected and as needed by that industry, and so demand is still a
little bit sluggish. But the earning stay from Ericson showed that its efforts to cut costs in this quite difficult telecoms market are paying off, and earlier this month it said that they would get rid of about thirteen percent of its staff in Sweden, which represents about sixteen hundred jobs, and there will be other jobs worldwide there will also
be slashed this year. And now future growth is really going to be focused on the AI boom for Ericson because that technology really requires networks to be updated, and the CEO, for example, said that things like drones or the AI glasses that are being developed by Meta that creates a lot of strain on networks and therefore that
needs to be updated. So AI is going to be a really big growth driver for Ericson and for its biggest rival, Nokia, which is a reporting next week as well, so we'll be watching if Nokia gets that that boost as well when it reports. Okay, and then meanwhile, the chemicals company BASF posting some losses, Chloe, are we seeing that reflected in markets? Yeah, So BSF fail this morning, and that is because it said that earnings had a dropped this year because of a drag from currency fluctuations
and then also lower prices for its products. So this is really indictive of the long lasting downturn that we have seen in that chemical sector in Europe for a while now, and there's been essentially too much capacity and too little demand, and especially from the car making industry, which is one of the main customers for BSF. So that's one of the really big problems. Though of course that might get better if the auto industry recovers this year.
And then the other thing that's been a drag is that energy costs have been really quite high in Europe and that's making it a lot more difficult for chemicals manufacturers in the region to compete with lower cost rivals from China, for example. So for BASF, those things have really dragged it down, but they are some good news, including the cash flow that is in pretty good shape and so that might meet a buyback and that usually gets investors a little bit more excited.
Okay, looking next to Denmark, APMOL and MASKS shares down two point nine percent. What's happening?
It was cut to an underperform rating by Bank of America analysts and analysts have called essentially what's happening structural overcapacity issues, which essentially means that they are now a lot of ships and perhaps maybe too little demand given those global trade tensions, and that overcapacity is going to become probably even more of a problem when the red Sea shipping route reopens, which had happened at some point this year, and Musk has already said that it had
managed to complete a couple of successful passages through that route which has been closed for a while. And when that reopens, that means that ships don't have to take the long way around around the Cape of Good Hope in at the southern tip of Africa, and so that means that the higher rates that shipping companies have been able to ask for over the last couple of years are going to come down. And all of that that means lower earnings for Musk and so perhaps quite a tough year for that company.
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