By Ludwig Burger

(Reuters) -French drugmaker Sanofi on Friday forecast faster earnings growth this year on strong demand for its bestselling drug Dupixent and for its flu vaccines, spurring a rise in its battered share price.

Sanofi said it now expects 2022 adjusted earnings per share to grow by about 16%, not taking into account an expected positive currency impact of between 9.5% and 10.5%. It had previously forecast growth of 15%.

It also reported a 26.5% rise in third-quarter business operating income, or adjusted earnings before interest and tax, to 4.5 billion euros ($4.5 billion), well ahead of an average analyst estimate of 4.17 billion.

Sanofi shares had plunged in August after disappointing trial results of a once-promising breast cancer drug candidate, heightening concerns about its development pipeline, while investors also fretted over legal claims that heartburn drug Zantac caused cancer.

The shares have not recovered much and Credit Suisse analysts have said Sanofi is trading about one third below its European peers, relative to estimated 2023 earnings.

Finance chief Jean-Baptiste de Chatillon, who has described the discount as grossly overdone, said on Friday that Sanofi would follow through on its strategy.”We know we have some headwinds and we are there to fight them and to demonstrate to our shareholders that we can create more value,” he told journalists on a call.

The shares jumped 2% at the open.

CANCER DRUG

But in a further development setback, 1.6 billion euros were written off the value of the most advanced drug project of Synthorx, a U.S. biotech firm Sanofi agreed to acquire for $2.5 billion in 2019. The cancer drug would come to market later than hoped, it said.

As a result, quarterly net income fell 10% to 2.1 billion euros.

Revenue from exzema and asthma drug Dupixent, jointly developed with Regeneron, jumped by a currency-adjusted 44.5% to 2.3 billion euros in the quarter, soundly beating an analyst consensus of 2.1 billion.

The company is pursuing further growth for Dupixent in inflammatory skin conditions and smoker’s lung, where keenly awaited trial data is expected in the first half of 2023.

Sales from influenza vaccines jumped by a currency-adjusted 32.4% to 2 billion euros, surpassing an analyst consensus of 1.6 billion, on swift uptake of a more expensive new high-dose shot.

CFO de Chatillon said the company also benefited from bringing forward the seasonal production ramp-up and distribution but added that overall appetite in the U.S. population for flu shots was low.

A strong U.S. dollar also boosted the value of overseas group revenue.

($1 = 1.0015 euros)

(Reporting by Ludwig Burger; Editing by Susan Fenton and David Holmes)

By Carolyn Cohn

LONDON (Reuters) -Amundi posted net outflows of 12.9 billion euros ($12.86 billion) in the third quarter, the French asset manager said on Friday, hurt by weak markets and concern about the economic outlook following the war in Ukraine.

The figure was much worse than consensus forecasts of 1 billion euros in outflows, according to KBW analysts.

The money manager reported assets under management at end-Sept of 1.9 trillion euros, down 2% in the last three months.

Asset managers benefited from government and central bank stimulus and demand from pent-up savings during the earlier stages of the COVID-19 pandemic.

But the war in Ukraine has hit markets and pushed up the cost of living, crimping asset volumes.

“We think our clients’ risk aversion will persist into the next quarter, as long as macro-economic uncertainties last,” CEO Valerie Baudson told a media call.

Amundi’s shares fell 1.5% early on Friday. KBW analysts called the results a “mixed bag”, though they reiterated their “outperform” rating on the stock.

German asset manager DWS this week recorded steady assets under management of 833 billion euros in the third quarter, unchanged from the previous quarter.

Amundi’s quarterly adjusted net income rose 4.7% on the quarter to 282 million euros, however, helped by cost-cutting and strong management fees, it said in a trading statement.

Major fund managers’ use of so-called liability-driven investments (LDI), involving high amounts of borrowing, caused a liquidity crisis for British pension funds last month, forcing the Bank of England to intervene to stabilise UK government bond markets.

Amundi does not offer such products, Baudson said.

“We have nothing similar to LDI anywhere in the world, it’s not an issue for us.”

(Reporting by Carolyn Cohn in London and Matthieu Prothard in Paris; Editing by Muralikumar Anantharaman)

By Kate Abnett

BRUSSELS (Reuters) -The European Union struck a deal on Thursday on a law to effectively ban the sale of new petrol and diesel cars from 2035, aiming to speed up the switch to electric vehicles and combat climate change.

Negotiators from the EU countries and the European Parliament, who must both approve new EU laws, as well as the European Commission, which drafts new laws, agreed that carmakers must achieve a 100% cut in CO2 emissions by 2035, which would make it impossible to sell new fossil fuel-powered vehicles in the 27-country bloc.

“This deal is good news for car drivers… new zero-emission cars will become cheaper, making them more affordable and more accessible to everyone,” Parliament’s lead negotiator Jan Huitema said.

EU climate policy chief Frans Timmermans said the agreement sent a strong signal to industry and consumers. “Europe is embracing the shift to zero-emission mobility,” he said.

The deal also included a 55% cut in CO2 emissions for new cars sold from 2030 versus 2021 levels, much higher than the existing target of a 37.5% reduction by then.

New vans must comply with a 100% CO2 cut by 2035, and a 50% cut by 2030 compared with 2021 levels.

With regulators increasing the pressure on carmakers to curb their carbon footprint, many have announced investments in electrification. Volkswagen boss Thomas Schaefer this week said that from 2033, the brand will only produce electric cars in Europe.

Still, the EU law met some resistance when it was proposed in July 2021, with European car industry association ACEA warning against banning a specific technology and calling for internal combustion engines and hydrogen vehicles to play a role in the low-carbon transition.

Negotiators agreed on Thursday that the EU will draft a proposal on how cars that run on “CO2 neutral fuels” could be sold after 2035.

Small carmakers producing less than 10,000 vehicles per year can negotiate weaker targets until 2036, when they would face the zero-emission requirement.

The law is the first to be finalised from a broader package of new EU policies, designed to deliver the bloc’s targets to cut greenhouse gas emissions.

Brussels is seeking deals on two more laws from the package in time for the United Nations climate negotiations in November, in a bid to show that despite a looming recession and soaring energy prices, the bloc is pressing ahead with its climate goals.

(Reporting by Kate Abnett; Editing by Josie Kao and Marguerita Choy)

By Will Dunham

WASHINGTON (Reuters) -The InSight lander, perched on the surface of Mars since 2018, will run out of power and stop operations within four to eight weeks, NASA said on Thursday, even as scientists detailed a big meteorite strike it detected that gouged boulder-sized chunks of ice surprisingly close to the planet’s equator.

Dust has been accumulating on solar panels that draw power for the U.S. space agency’s stationary lander, exacerbated by a dust storm, and has been depleting its batteries, planetary geophysicist Bruce Banerdt of NASA’s Jet Propulsion Laboratory, InSight mission’s principal investigator, told a briefing.

InSight’s mission, which has helped reveal the internal structure of Mars and its seismic activity, originally was planned for two years but was extended to four. When the power runs out, NASA will lose contact with InSight, Banerdt said.

“InSight has been successful beyond my expectations,” Banerdt told Reuters. “We have determined the thickness of the crust, the size and density of the core, and details of the structure of the mantle. For the first time we have a detailed global map of the deep interior of another planet – other than the Earth and moon.”

InSight also established that Mars is seismically active, detecting 1,318 marsquakes.

Two research papers published in the journal Science detailed meteorite strikes on the Martian surface detected by InSight in September and December of last year. Seismic waves triggered by the impacts revealed fresh details about the structure of the Martian crust, the planet’s outer layer.

“What an awesome capstone science result to end on – literally going out with a bang,” Lori Glaze, director of NASA’s Planetary Science Division, told reporters.

Of particular interest was a space rock with a diameter estimated at 16-39 feet (5-12 meters) that crashed last Dec. 24 in a region called Amazonis Planitia, carving a crater about 490 feet (150 meters) wide and 70 feet (21 meters) deep.

It caused a magnitude 4 quake detected by InSight’s seismometer instrument, while cameras aboard the Mars Reconnaissance Orbiter observed the crater from space. Boulder-sized blocks of ice were seen strewn around the crater’s rim.

Objects that large enter Earth’s atmosphere about once a year but generally burn up in our planet’s thicker atmosphere.

“A whole lot of water ice was exposed by this impact,” Brown University planetary scientist Ingrid Daubar, part of the InSight science team, told the briefing. “This was surprising because this is the warmest spot on Mars, the closest to the equator we’ve ever seen water ice.”

Glaze said that while ice is known to exist near the Martian poles future human exploration missions would aim to put astronauts as close to the equator as possible for warmer conditions. Ice near the equator could provide resources such as drinking water and rocket propellant.

“Having access to ice at these lower latitudes, that ice could be converted into water, oxygen or hydrogen – that could be really useful,” Glaze said.

The September 2021 crater also was large, about 425 feet (130 meters) wide. The two were the largest impacts detected by InSight since arriving on Mars.

InSight for the first time detected seismic waves traveling like ripples on water along the Martian surface, as opposed to deeper in the planet’s body. The reverberation from the two impacts gave clues about the crust over a wide geographical expanse in the northern hemisphere.

The three-legged InSight sits in a vast and relatively flat plain called Elysium Planitia, just north of the equator. Until now, InSight had obtained data on the structure of the Martian crust, consisting mostly of fine-grained volcanic basalt rock, only in the area beneath its landing site.

The crust at the landing site was composed of relatively soft material, less dense rock. This was not the case for the other regions covered by the new data, where the crust appears denser.

“As a consequence of our analysis of surface waves, we now understand that the crust of Mars north of the equatorial dichotomy – a conspicuous feature seen from the topographic variation on Mars that divides the southern highlands and northern lowlands – has a relatively uniform structure,” said seismologist Doyeon Kim of the Institute of Geophysics at ETH Zurich, lead author of one of the studies.

(Reporting by Will Dunham; Additional reporting by Steve Gorman; Editing by Rosalba O’Brien)

(Reuters) -Nicotine and tobacco products group Swedish Match on Friday reported third-quarter operating profit in line with forecasts as strong sales of its smoke-free products, such as nicotine pouches, offset weak results in other business areas.

Swedish Match is in the process of being bought by Philip Morris International and its board late on Thursday said it still recommended the offer, after its Swiss rival upped the offer price.

Quarterly operating profit rose to 2.40 billion Swedish crowns ($218.74 million) from 2.08 billion a year earlier. Analysts polled by Refinitiv had on average forecast a profit of 2.47 billion crowns.

Sales in its Smokefree unit rose 30% in the quarter. The unit includes both the company’s main product “snus” – a Swedish-style wet snuff – and its newer and fastest-growing product Zyn – tobacco-free nicotine pouches that like snus are put under the lip and sucked.

($1 = 10.9718 Swedish crowns)

(Reporting by Marie Mannes, editing by Stine Jacobsen)

TOKYO (Reuters) – Japanese factories most likely cut back output in September, a Reuters poll showed on Friday, ending a three-month growth streak on a tailwind from the end of strict COVID-19 measures in China and eased supply bottlenecks.

Industrial production probably decreased 1% in September from the previous month, according to the median forecast of 17 economists in the poll.

Production growth in “transport equipment and related sectors may have come to an adjustment stage,” said economists at SMBC Nikko Securities. They added that September’s output dip would remain small as production of general machinery was still solid, citing exports data.

Toyota Motor Corp, the world’s largest carmaker by vehicle sales, on Friday said that its global production climbed 30% in the quarter ended in September, but that the semiconductor shortage was still weighing on it, especially at its domestic plants.

Japanese manufacturers’ sentiment has been worsening since last month, a Reuters corporate survey showed, on concerns over rising costs due to global inflation and a weak yen.

“Industrial production will likely go back and forth with inflation and the expected slowdown in overseas economies,” Takeshi Minami, chief economist at Norinchukin Research Institute, said on the outlook.

Separate data is expected to show retail sales rose 4.1% in September from a year earlier, extending the annual growth for a seventh month since March, when the government lifted all coronavirus curbs.

Japan’s economic reopening, now coupled with eased border controls for foreign tourists, has helped a consumption-led recovery, although three-decade-high inflation clouds the prospect of further gains. After a strong 3.5% annualised growth in April-June, analysts polled by Reuters are expecting a 1.3% expansion in the third quarter and 2.0% growth in the fourth quarter for the Japanese gross domestic product.

The government will release the factory output and retail sales data at 8:50 a.m. on Oct. 31 (2350 GMT, Oct. 30).

(This story has been refiled to add missing words in paragraph 8)

(Reporting by Kantaro Komiya; Editing by Gerry Doyle)

By Riham Alkousaa

BERLIN (Reuters) – Germany has enlisted help from Brussels to revive its solar panel industry and improve the bloc’s energy security as Berlin, reeling from the consequences of over-reliance on Russian fuel, strives to cut its dependency on Chinese technology.

It is also reacting to a new U.S. law that has raised concern the remains of Germany’s formerly-dominant solar industry could relocate to the United States.

Once the world’s leader in installed solar power capacity, Germany’s solar manufacturing collapsed after a government decision a decade ago to cut subsidies to the industry faster than expected drove many solar firms to leave Germany or into insolvency.

Near the eastern city of Chemnitz in what is known as Saxony’s Solar Valley, Heckert Solar is one of half a dozen survivors surrounded by abandoned factories that the company’s regional sales manager Andreas Rauner described as “investment ruins”.

He said, the company, now Germany’s largest solar module, or panel-maker, managed to weather the impact of state-subsidised Chinese competition and the loss of German government backing through private investment and a diversified customer base.

In 2012, Germany’s then conservative government cut solar subsidies in response to demands from traditional industry whose preference for fossil fuel, especially cheap imports of Russian gas, has been exposed by supply disruption following the Ukraine war.

“We are seeing how fatal it is when the energy supply is completely dependent on other actors. It’s a question of national security,” Wolfram Guenther, Saxony’s state minister for energy, told Reuters.

As Germany and the rest of Europe seek alternative sources of energy, partly to compensate for missing Russian supplies and partly to meet climate goals, interest has surged in rebuilding an industry that in 2007 produced every fourth solar cell worldwide.

In 2021, Europe contributed only 3% to global PV module production while Asia accounted for 93%, of which China made 70%, a report by Germany’s Fraunhofer institute found in September.

China’s production is also around 10%-20% cheaper that in Europe, separate data from European Solar Manufacturing Council ESMC shows.

UNITED STATES ALSO AN ENERGY RIVAL

New competition from the United States has increased calls in Europe for help from the European Commission, the EU executive.

The European Union in March pledged to do “whatever it takes” to rebuild European capacity to manufacture parts for solar installations, following Russia’s invasion of Ukraine and the energy crisis it provoked.

The challenge increased after the U.S. Inflation Reduction Act was signed into law in August, providing a tax credit of 30% of the cost of new or upgraded factories that build renewable energy components.

In addition, it gives tax credit for each eligible component produced in a U.S. factory and then sold.

The concern in Europe is that that will draw away potential investment from its domestic renewable industry.

Dries Acke, the Policy Director at industry body SolarPower Europe, said the body had written to the European Commission urging action.

In response, the Commission has endorsed an EU Solar Industry Alliance, set to be launched in December, with the aim of achieving over 320 gigawatts (GW) of newly installed photovoltaic (PV) capacity in the bloc by 2025. That compares with a total installed of 165 GW by 2021.

“The Alliance will map the availability of financial support, attract private investment and facilitate the dialogue and match-making between producers and offtakers,” the Commission told Reuters in an email.

It did not specify any funding amounts.

Berlin is also pushing to create a framework for PV manufacturing in Europe similar to the EU Battery Alliance, Economy Ministry State Secretary Michael Kellner told Reuters.

The battery alliance is considered to have had a major part in developing a supply chain for Europe’s electric vehicle industry. The Commission said it would ensure Europe can meet up to 90% of demand from domestically-produced batteries by 2030.

Solar demand meanwhile is expected to keep growing.

Germany’s new registered residential photovoltaic systems rose by 42% in the first seven months of the year, data from the country’s solar power association (BSW) showed.

The association’s head Carsten Koernig said he expected demand to keep strengthening over the rest of the year.

Regardless of geopolitics, relying on China is problematic as supply bottlenecks, exacerbated by Beijing’s zero-COVID policy, have doubled waiting times for solar components delivery compared to last year.

Berlin-based residential solar energy supplier Zolar said orders have risen by 500% year-on-year since the Ukraine war began in February, but clients might have to wait for six-to-nine months to get a solar system installed.

“We’re basically limiting the number of customers that we accept,” Alex Melzer, Zolar chief executive said.

European players from beyond Germany relish the opportunity to help cover demand by reviving Saxony’s Solar Valley.

Switzerland’s Meyer Burger last year opened solar module and cell plants in Saxony.

Its Chief Executive Gunter Erfurt says the industry still needs a specific stimulus or other policy incentive if it is to help Europe cut its reliance on imports.

He is, however, positive, especially since the arrival last year of Germany’s new government, in which Green politicians hold the crucial economic and environment ministries.

“The signs for the solar industry in Germany are much, much better now,” he said.

($1 = 1.0006 euros)

(Reporting by Riham Alkousaa in Berlin, Kate Abnett in Brussels and Nichola Groom in Los Angeles; editing by Barbara Lewis)

(Reuters) -Signify, the world’s biggest maker of lights, cut its full-year profit margin and sales guidance on Friday, hit by lower consumer demand and a slowdown in China amid uncertain growth outlook.

“We have shifted gears to adapt the company to a structurally weaker external environment in the coming quarters, when current headwinds and volatility are likely to persist,” Chief Executive Officer Eric Rondolat said in a statement, adding that Signify would focus on controlling costs and cash flow. The Dutch group said it now expects adjusted earnings before interest, taxes and amortisation (EBITA) margins and free cash flow to be at the lower end of its guidance.

Comparable sales growth will be between 2% and 3% for 2022, down from previous guidance of 3-6%, it added.

Its range for adjusted EBITA margin is between 11.0% and 11.4%, with free cash flow equal to 5% to 7% of sales.

Signify, the former lighting arm of Philips, sells mostly LED lights and lighting systems to both consumers and businesses.

In the third quarter, the professional segment offset weaker demand from consumers, the group said, with total sales rising to 1.91 billion euros ($1.90 billion), up 4.3% in comparable sales.

In July, Signify had lowered its margin and free cash flow outlook, saying it expected its profit margins to decline as supply chain disruption and currency effects weighed on its earnings.

($1 = 1.0026 euros)

(Reporting by Valentine Baldassari; editing by Josephine Mason and Rashmi Aich)

By Dawn Chmielewski and Nivedita Balu

(Reuters) – Apple Inc on Thursday reported revenue and profit that topped Wall Street targets, one of the few bright spots in a tech sector battered by spending cutbacks due to inflation.

The forecast for the holiday quarter was more grim. While not providing specific numbers, Apple said revenue growth would fall below 8% in the December quarter but did not go as far as Amazon.com, whose dire holiday outlook sent its shares down 14%.

Apple shares initially dipped in after-hours trading but recovered in positive territory.

The Cupertino, California-based tech giant was saved by its oldest technology, its laptop computers, while its star, the iPhone, stumbled.

Although iPhone sales were not as strong as some analysts had targeted, they were still a record for the September quarter. Mac sales of $11.5 billion were far head of analyst estimates of $9.36 billion.

Apple’s results showed some resilience in the face of a weak economy and strong U.S. dollar that has led to disastrous reports from many tech companies. Like Facebook parent Meta and Snap, Apple is seeing softness in advertising spending. Overall, Apple said quarterly revenue rose 8% to $90.1 billion, above estimates of $88.9 billion, and net profit was $1.29 per share, topping with the average analyst estimate of $1.27 per share, according to Refinitiv data.

“We did better than we anticipated, in spite of the fact that foreign exchange was a significant negative for us,” said Chief Financial Officer Luca Maestri.

The rising U.S. dollar has hit many companies such as Apple that generate substantial foreign revenue and are getting less cash back when they convert it. For consumers, it increases the price of new devices when bought in countries outside of the United States.

Apple’s iPhone sales for the company’s fiscal fourth quarter rose to $42.6 billion, when Wall Street expected sales of $43.21 billion, according to Refinitiv IBES.

Maestri said iPhone sales set a record for the September quarter, improving 10% over the prior year’s quarter and exceeding the company’s forecast.

“The iPhone number is a hint of the turmoil and uncertainty in the market, but Apple has different ways to offset,” said Runar Bjorhovde, a research analyst at market research firm Canalys.

Sales of Apple’s Mac computers received a boost from this summer’s introduction of redesigned MacBook Air and MacBook Pro laptops. New tablets went on sale this week.

Apple said its gross margin of 43.3% was a record for the September quarter.

Maestri said the robust computer sales also reflected a backlog of orders, caused by a prolonged shutdown at one of the factories that produces Macs, which the Apple was able to fill in the quarter.

The company reported sales of iPads were $7.2 billion, compared with the average estimate of $7.94 billion.

Apple wearables such as AirPods and other accessories notched sales of $9.7 billion, slightly ahead of the Wall Street forecast of $9.2 billion.

“They said they didn’t have particular issue with supply, so that seems to be a thing of the past,” said Creative Strategies consumer analyst Carolina Milanesi.

Growth in the company’s services business, which has buoyed sales and profits in recent years, saw a rise to $19.2 billion in revenue, below the estimate of $20.10 billion.

Maestri said Apple experienced softness in digital advertising and gaming, as have others in the sector.

“Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment,” Jesse Cohen, senior analyst at Investing.com.

In China, which has experienced a sharp economic slowdown, Apple reported fourth-quarter sales of $15.5 billion. That is a gain from the prior quarter, when Apple logged sales of $14.6 billion.

Apple said it now has 900 million paying subscribers to its services, up from the previous quarter’s 860 million.

Read more:

Meta stock craters over bleak forecast and expensive metaverse bets

Alphabet’s miss fans inflation fears across digital advertising

Samsung defies chip downturn with aggressive supply and capex plans

Cloud to PCs, Microsoft forecasts spook investors as economy bites

(Reporting by Dawn Chmielewski in Los Angeles and Nivedita Balu in Bengaluru; Editing by Peter Henderson and Lisa Shumaker)

By Ann Saphir

(Reuters) – The Federal Reserve is seen slowing its aggressive rate-hike pace in December, with data published Thursday offering new evidence that the economic slowdown that the central bank is trying to engineer is getting underway.

Fed Chair Jerome Powell and his 18 fellow central bankers are still expected to back a fourth-straight 75-basis-point rate hike at their meeting next week.

But betting in rate futures markets is now running strongly in favor of a half-point increase at the Fed’s December meeting — a move that would bring the policy rate to a 4.25%-4.5% range — and no more than a half a point further over the next two meetings. (Graphic: December downshift?, https://graphics.reuters.com/USA-FED/zdpxdyqojpx/chart.png)

Bets are also increasing on interest rate cuts for the latter part of 2023.

U.S. economic growth rebounded in the third quarter, data Thursday showed, but the same report from the Commerce Department showed consumer spending slowed to a 1.4% rate from the prior quarter’s 2.0% pace, and the GDP deflator – an indication of price pressures — eased to 4.1% from the prior quarter’s 9.1%.

The slowdown in consumer spending is an “indication that higher interest rates are biting into the pocketbooks of the consumer,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

A separate report showed new orders for non-defense U.S. capital goods excluding aircraft, seen as a proxy for business spending, unexpectedly fell.

The Fed has lifted interest rates by a full three percentage points so far this year. Though the housing market has slowed dramatically, as mortgage rates have topped 7%, evidence of higher interest rates cooling demand in other parts of the economy has been harder to spot.

Fed policymakers have signaled they will keep raising interest rates to bridle demand in a bid to bring down inflation running far higher than the Fed’s 2% target.

They have also signaled that once they get rates high enough, they don’t intend to reverse course quickly and risk letting inflation heat up again.

Traders are betting they won’t follow through; futures contracts traded at CME Group Inc. are pricing in a top policy-rate range of 4.75%-5% by March 2023, falling to a 4.25%-4.5% range by December.

Fed policymakers will want to parse the data in the lead-up to their last meeting of the year on December 13-14, but may signal after next week’s meeting that their next step could be a downshift.

Economists say the U.S. economic tide is already turning.

“Real consumer spending on goods will fall further, services spending will slow, there are signs that business investment is wavering, and the housing market is reeling under the weight of higher mortgage interest rates,” wrote Regions’ economist Richard Moody. “Moreover, the full impact of higher interest rates has yet to make its way through the economy.”

(Reporting by Ann Saphir; Additional reporting by Lucia Mutikani and Stephen Culp; Editing by Chizu Nomiyama, Aurora Ellis and Daniel Wallis)