Key Takeaways
- Rio Tinto (RIO) reported H1 2025 underlying profit and net income below estimates, but raised its interim dividend above projections, signaling confidence despite profit misses.
- Porsche AG (P911) saw its H1 2025 revenue and operating profit fall short of expectations, leading to a downward revision of its full-year operating return on sales outlook amidst a challenging global environment.
- HSBC (0005.HK) stated that impairments related to its China bank stake are "paper losses" and will not impact its capital distribution plans, even as its first-half pretax profit slumped due to these impairments.
- China's Politburo highlighted economic challenges and called for a more proactive fiscal policy, job stabilization, and support for innovation, aiming to boost domestic demand.
- Tsunami warnings were issued across the Pacific, including Hawaii, following a powerful 8.8-magnitude earthquake off Russia's coast, with waves exceeding 3 meters in some Russian areas.
Global markets are navigating a complex landscape marked by mixed corporate earnings, China's economic policy adjustments, and natural disaster alerts. Major companies like Rio Tinto (RIO), Porsche AG (P911), GSK (GSK), Hermès (RMS), Danone (BN), and Adidas (ADS) have released their latest financial results, revealing varied performances against analyst expectations. Meanwhile, China's leadership has outlined strategies to bolster its economy, and a significant earthquake off Russia's coast has triggered widespread tsunami warnings.
Corporate Earnings: A Mixed Bag
Rio Tinto (RIO) reported a half-year underlying profit of $4.81 billion, missing the estimated $5.17 billion. Net income also came in below expectations at $4.53 billion against an estimated $4.9 billion. Despite these misses, the mining giant announced an interim dividend per share of $1.48, raising its dividend above Bloomberg's projection and indicating a resilient financial position. The company's revenue for the first half was $26.87 billion, a slight increase of 0.3%.
Luxury goods powerhouse Hermès (RMS) posted Q2 2025 revenue of €3.91 billion, slightly below the estimated €3.93 billion. Sales at constant exchange rates grew by 9%, largely in line with expectations. The Asia Pacific region showed strong growth with revenue up 5.2% at constant exchange rates, surpassing estimates. Leather Goods sales also saw a significant increase of 14.8% at constant exchange rates.
In the automotive sector, Porsche AG (P911) faced a challenging first half of 2025. The company's revenue reached €18.16 billion, falling short of the estimated €18.37 billion. Operating profit was €1.01 billion, considerably lower than the estimated €1.26 billion. Consequently, the operating return on sales (ROS) stood at 5.5%, below the estimated 6.55%. Porsche AG has revised its full-year revenue outlook to €37 billion–€38 billion (from an estimated €37.31 billion) and its FY operating ROS outlook to 5%–7% (down from a prior 6.5%–8.5%), reflecting ongoing macroeconomic and geopolitical headwinds.
Pharmaceutical giant GSK (GSK) delivered a strong Q2 2025 performance, with revenue of £7.99 billion exceeding the estimated £7.84 billion. Adjusted EPS came in at 46.5p, higher than the estimated 42.4p. Key vaccine sales, including Shingrix at £853 million and Arexvy at £66 million, also surpassed expectations. The company sees its full-year adjusted EPS at the high end of its +6% to +8% growth projection.
French consumer goods company Danone (BN) reported Q2 2025 revenue of €6.91 billion, slightly below the estimated €6.93 billion. However, like-for-like sales grew by 4.1%, beating the estimated 3.79%, driven by strong demand in China for infant milk formula and medical nutrition products. Danone reaffirmed its full-year like-for-like sales growth outlook of +3% to +5%.
Sportswear giant Adidas (ADS) reported Q2 2025 revenue of €5.95 billion, below the estimated €6.21 billion. However, operating profit reached €546 million, exceeding the estimated €503.1 million. Net profit from continuing operations was €375 million, higher than the estimated €340.2 million. The company maintained its full-year operating profit outlook of €1.7 billion–€1.8 billion.
Financial Sector and Global Policy
HSBC (0005.HK) addressed concerns regarding impairments from its stake in a Chinese bank, stating these are "paper losses" and will not affect its capital distribution plans. This comes as the bank's first-half pretax profit slumped by 26% to $15.8 billion, missing analyst estimates, largely due to a $2.1 billion write-down related to its investment in China's Bank of Communications.
In Germany, retail sales showed a positive trend in June. Month-over-month retail sales increased by 1.0%, surpassing the estimated 0.5% and reversing a previous decline. Year-over-year, German retail sales were up 4.6%.
China's Politburo held a significant meeting, emphasizing the need for a more proactive fiscal policy to address economic challenges. The Politburo called for efforts to stabilize jobs, support innovation, and carefully manage competition among firms, with a focus on expanding domestic demand and boosting consumption. The meeting also indicated that the fourth plenum of the party's Central Committee will take place in October to discuss the country's next five-year plan.
Geopolitical and Natural Events
A powerful 8.8-magnitude earthquake struck off the coast of Russia, triggering tsunami warnings across the Pacific. Tsunami waves near the Russian Pacific town of Severo-Kurilsk exceeded 3 meters in height, with the most powerful wave reaching up to 5 meters. Warnings were issued for Hawaii, Japan, Alaska, and other Pacific islands, with evacuations underway in some areas. The first waves reached Hokkaido in northern Japan, measuring around 30cm.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.