Trending tickers: Darktrace l GameStop l Barratt Developments l Brent crude

Darktrace (DARK.L)

Shares in Darktrace (DARK.L) fell 4.28% on Wednesday morning off the back of its latest earnings report.

The British cyber security company posted a 52% rise in adjusted core earnings in the 12 months to the end of June but said that changes to its sales commission would squeeze its earnings margin in the current year.

Darktrace said the decision to pay 100% of its sales commissions up front, rather than 50% with the remainder typically one year later, would result in an adjusted core earnings range of 17% to 19% for the year.

Read more: FTSE and European stocks lower amid weak UK economic outlook

“Darktrace has had a volatile time as a public company – right from the start it was under pressure thanks to its associations with controversial tech entrepreneur Mike Lynch. Question marks over its transparency and a high-profile bear raid earlier this year also put it under the cosh,” AJ Bell investment director, Russ Mould, said.

Mould further noted that an independent audit of its accounts gave the company an apparent clean bill of health over the summer but said it really needs a steady period of delivery to help win credibility with the market.

GameStop (GME)

Wall Street will be watching GameStop stock today with the electronic retail company set to reveal its latest financial statements after the bell today.

It is forecast to report a 0.5% rise in revenue to $1.141bn (£0.91bn), while its net loss is predicted to come in at $49.4m, which would be less than half the $108.7m loss we saw last year, according to market analyst Joshua Warner.

It comes as the video game retailer has posted losses for over three years now as demand for hardware remains the main problem.

Looking at the company’s stock chart, its share price rose 4.40% at close of trading in the US on Tuesday and is projected to rise again today, by 0.10%, according to pre-market estimates.

Since the start of 2023, GameStop’s share price has gained about 17%. However, since a recent peak reached on 13 June, it has fallen by about 30%.

Barratt Developments (BDEV.L)

Shares in UK home construction company Barratt Developments fell 2.4% after the company said forward sales stood at £2.44bn as of 27 August, down 36% year-on-year.

It also forecast a reduction in margins but did not provide profit guidance.

Richard Hunter, head of markets at Interactive Investor, commented “The list of headwinds is well-documented and lengthy and is likely to spill over into the new financial year. Squeezed mortgage affordability and availability is resulting in waning customer demand, while broader concerns over general economic growth, consumer confidence and spending are all darkening the picture.

“At the same time, the removal of the Help to Buy scheme has removed an important plank from first-time buyers and legacy costs for remedial building work continue to come at a significant cost, totalling some £179 million in this period.”

He also noted that the spectre of inflation is an additional burden, with house price inflation failing to keep up with build cost inflation, which has been running between 9% and 10% over the year.

“There are, however, some signs of improvement on this front as some of these pressures show signs of easing, and Barratts is predicting a figure of nearer 5% over the coming year,” Hunter added.

Brent crude oil (BZ=F)

Both Brent and US crude, or WTI, were both trading lower on Wednesday, putting an end to Tuesday’s rally.

Brent hit $90 a barrel last night for the first time since November last year and US crude came close after Saudi Arabia and Russia extended crude output cuts.

Saudi Arabia first implemented the 1 million barrel per day reduction in July and has since extended it on a monthly basis while Russia also pledged to reduce exports by 500,000 barrels per day in August and by 300,000 barrels per day in September.

Today, however, crude prices are lower, easing off slightly from yesterday. US crude oil (CL=F) fell 0.22% to trade at $86.50 a barrel, while Brent crude (BZ=F) lost 0.26% and was at $89.81 a barrel.

“The extension of output cuts by Russia and Saudi Arabia through to the end of the year has helped oil prices regain the $90 per barrel mantle for the first time in 2023 and this is likely to add to inflationary pressures. It may force the likes of the Federal Reserve to keep interest rates higher for longer and this is helping to undercut the more comfortable narrative that the trajectory for rates is on the way to shifting,” AJ Bell investment director, Russ Mould, said.

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