News

By Natalie Grover

(Reuters) -AstraZeneca raised its full-year earnings outlook on Thursday after strong sales of its key cancer drugs helped it beat quarterly profit and revenue forecasts, driving its shares to a 2-1/2 month high.

The Anglo-Swedish company said it managed to grow its business in China despite protracted COVID lockdowns and was no longer pursuing U.S. approval for its COVID-19 vaccine.

AstraZeneca is seen as a bellwether for the pharmaceutical sector in China, which accounted for about 16% of the company’s total revenue last year.

Sales in China have been hurt by lower drug prices while COVID lockdown measures have kept some patients from being diagnosed and seeking care.

Despite the headwinds, the company generated 8% sales growth in the region on a constant currency basis in the quarter, whereas it had expected a decline, chief executive Pascal Soriot said on a media call.

Geopolitical challenges are growing in the region due to tensions between China and Taiwan, though Soriot said that had not affected the company so far.

“We haven’t experienced any of those difficulties some industries actually may experience,” he said.

Better-than-expected sales of AstraZeneca’s cancer medicines, including Tagrisso, Imfinzi and Enhertu, helped the company’s quarterly revenue beat, with sales of its broader oncology portfolio rising 24%.

AstraZeneca, which reports its results in dollars, raised its adjusted earnings per share forecast for 2022 to grow by a “high twenties to low thirties percentage”, even though it expects a strong U.S currency to be a drag on full-year revenue and profit.

Previously, it had forecast adjusted EPS growth in the “mid-to-high twenties percentage”.

Its strong quarterly performance, coupled with recent positive pipeline updates underlies “why we continue to see AZN as the best growth story in EU Pharma,” Barclays analysts wrote in a note.

DIVERSIFIED PORTFOLIO

Soriot said the company had decided not to pursue U.S. approval for its COVID shot, noting declining demand for vaccines in the country and that the market was well-served by mRNA shots produced by rivals Pfizer and Modena.

“To be honest, it didn’t make any sense for us to continue pursuing this application,” he said.

AstraZeneca produced one of the first COVID-19 shots, but lost out to the mRNA vaccines.

But global sales of the company’s COVID therapy, Evusheld, have steadily grown, partially offsetting the rapid decline in COVID vaccine sales.

“Whilst some of the other key players in the COVID-19 market started to show a decline in momentum, AstraZeneca’s diversified portfolio…has allowed them to stay on top and not be affected by the reduced global uptake of vaccines,” said Citeline analyst Zhyar Said.

Evusheld continues to demonstrate strong efficacy but there are a couple of variants that are resistant to it, Soriot said.

The company is now working on an upgraded version of the therapy it hopes to have ready by the third or fourth quarter of next year, he added.

(Reporting by Natalie Grover in London. Editing by Jane Merriman, Tomasz Janowski and Emelia Sithole-Matarise)

The 27th World Climate Conference has begun in the Egyptian seaside resort of Sharm El Sheikh. It is already clear that the international community will miss its climate targets. The EU will probably tighten its own targets again. “Ambitious plans alone will not solve the problem, however”, explains Markus W. Voigt, CEO of the aream Group.

At the United Nations Climate Change Conference, delegates from more than 190 countries are discussing the further implementation of the 2015 Paris Climate Agreement but limiting global warming to 1.5 degrees Celsius compared to the pre-industrial era is no longer achievable. According to the UN Environment Programme’s Emission Gap Report 2022, the world is heading for a temperature rise of over 2.5 degrees.

Pressure is therefore growing in the EU to set stricter climate targets. So far, the Union wants to reduce its emissions by 55 percent by 2030 compared to 1990. Some measures have been tightened up in the meantime but have not yet been adopted – as has the multi-billion “Repower” programme, with which the EU wants to drive forward the expansion of renewable energies and reduce dependence on Russian energy supplies.

The good weather in October already helped to reduce German gas consumption by generating higher yields in solar energy production: In the aream portfolio, the target value was exceeded by 16 percent in Germany. Yields in Spain (target achievement 95 percent) and Italy (91 percent) were slightly below average. In contrast, the wind blew a little stronger again in Germany in October, but still remained below average. The target achievement was 90 percent. “Viewed over the year, however, we are still on track with 95 per cent”, says Voigt.

In the end, the EU could probably raise its emissions target to 60 percent reduction by 2030. By then, the share of electricity from renewable sources should rise to 80 per cent – from the current 40 to 50 per cent. “What is needed is a significantly accelerated expansion”, says Voigt. “However, stricter targets are not enough to achieve this.” A study by the Ruhr University in Bochum/Germany, for example, shows that municipal building regulations still inhibit the expansion of solar energy. “Only the targeted reduction of bureaucratic obstacles will bring the expansion target for renewables within reach!”

About aream

The aream Group is a fully integrated investment and asset manager for institutional investors with a focus on sustainable infrastructure in the renewable energy sector, which includes wind and solar power, grids and storage technology. In this context, aream is represented along the entire value chain from project development to plant operation. With a transaction volume of more than EUR 1.5 billion, the company has been covering the entire spectrum of asset management services for over 15 years and ensures the commercial and technical optimization of the assets. In addition to classic project investments in clean energy, aream also offers investment opportunities in climate-tech companies: directly or via private equity solutions. aream combines investment expertise with technical and commercial know-how and ensures sustainable performance with stable distributions, returns and value growth through a structured investment and risk management process. More information: www.aream.de.

By Brendan Pierson

(Reuters) -CVS Health Corp, Walgreens Boots Alliance Inc and Walmart Inc have tentatively agreed to pay about $13.8 billion to resolve thousands of state and local government lawsuits accusing the chains of mishandling opioid painkillers, according to two people familiar with the negotiations.

The proposed settlement calls for CVS to pay $5 billion over 10 years, Walgreens to pay $5.7 billion over 15 years and Walmart to pay $3.1 billion, mostly up front, according to the people. The sources declined to be identified, saying they were not authorized to speak publicly about the matter.

CVS, Walmart and Walgreens declined to comment. A spokesperson for the plaintiffs’ attorneys in the litigation did not immediately respond to a request for comment.

The proposed settlement, which would be the first nationwide deal with retail pharmacy companies, follows nationwide opioid settlements with drugmakers and distributors totaling more than $33 billion.

In more than 3,300 lawsuits, beginning in 2017, state and local governments accused drugmakers of downplaying the risks of their opioid pain medicines, and distributors and pharmacies of ignoring red flags that prescriptions were being diverted into illegal trafficking.

They said the resulting human toll, as well as strain on public health services and law enforcement, was a public nuisance that the companies must pay to fix.

CVS, Walgreens and Walmart are the three largest retail pharmacies in the country by market share. If their settlement becomes final, it will put much of the sprawling, years-long litigation over opioids to rest, though cases are still pending against smaller, more regionally focused pharmacy operators including Rite Aid Corp and Kroger Co.

Plaintiffs had scored some significant trial victories against pharmacy chains, including a $650.6 million judgment in favor of two Ohio counties against CVS, Walgreens Boots Alliance and Walmart Inc, and a ruling that Walgreens contributed to the opioid epidemic in San Francisco.

Previous settlements netted $21 billion from the three largest U.S. drug distributors, $5 billion from Johnson & Johnson, $4.35 billion from Teva Pharmaceutical Industries Ltd, $2.37 billion from AbbVie Inc and $450 million from Endo International Plc.

State and local authorities have said they will use the money from the settlements to combat the opioid crisis, which according to federal government data has caused nearly 650,000 overdose deaths since 1999 and is continuing to worsen.

Prescriptions for opioids rose sharply in the 1990s as companies aggressively promoted the drugs, long used primarily in cancer patients, as a safe way to treat all kinds of chronic pain.

Overdoses involving opioids, including prescription pills and heroin, surged further during the COVID-19 pandemic, increasing 38% in 2020 over the previous year and another 15% in 2021, according to the U.S. Centers for Disease Control and Prevention.

The agency has attributed much of the recent rise in overdose cases to illegally manufactured fentanyl, a powerful synthetic opioid.

A congressional report last month put the economic toll of the opioid crisis in 2020 alone at $1.5 trillion.

(Reporting by Baranjot Kaur in Bengaluru, Brendan Pierson in New York and Nate Raymond in Boston; Editing by Alexia Garamfalvi and Kenneth Maxwell)

Company addresses the urgent need to train nurses and doctors more rapidly and is already being used at scale in hospitals and universities across the US and UK

27th October, London: Oxford Medical Simulation (OMS), a provider of highly realistic virtual reality healthcare training, has raised a further £2.1 million in a funding round that included ACF Investors and angel investor Dr Nicolaus Henke, former chairman of Quantum Black and former head of McKinsey’s global healthcare practice.

OMS is a software platform that uses immersive VR simulations with AI-controlled patients to train healthcare professionals using hundreds of clinical scenarios. These scenarios let learners train whenever they need to, practicing in virtual consultations, emergencies and procedures so they don’t risk lives in the real world. As well as enhancing training quality, these simulations also allow many more healthcare professionals to be trained in a shorter space of time: a conventional training centre will deliver around 200 simulations per month, whereas OMS recently delivered 6,000 sessions per month in one site alone, at a fraction of the cost. 

Dr Jack Pottle, Chief Medical Officer and co-founder of OMS, notes that this efficiency provides a practical solution to healthcare systems around the world that are facing a major crisis in staffing. Presently, healthcare providers simply cannot train enough workers to keep up with demand. A July 2022 report by the UK’s parliamentary health and social care select committee found that the NHS is facing the “greatest workforce crisis in their history” and had nearly 100,000 advertised vacancies as of September 2021.

A recent report by McKinsey called the crisis a “gathering storm” and predicted that the US will face shortages of up to 450,000 registered nurses and 80,000 physicians by 2025. Studies suggest that pressures resulting from these shortages will also compromise the competency of newly trained staff, worsening the situation. 

The Kings Fund – a leading healthcare think tank – notes: “The training of new staff is a key route to supplying the staff that health systems need”. To address this crisis, health systems need to rapidly increase their training capacity.

Michael Wallace, CEO and co-founder of OMS, commented on the investment: “We see this funding as an opportunity to supercharge our growth and rapidly increase the number of healthcare professionals around the world who have access to our training. 

“We want to enable nurses, doctors and allied healthcare professionals to do what they do with confidence and competence. We believe that by providing immersive, hyper-realistic training on a massive scale we can deliver better training to many more people and ultimately improve health outcomes for patients.” 

The company’s client base includes a wide range of NHS Trusts and universities as well as leading US universities, including John Hopkins University and Duke University, and several US health systems. OMS will use this latest funding to rapidly expand its product offering across healthcare education and practice, and to scale its US expansion. 

Tim Mills, Managing Partner at ACF Investors comments: “Oxford Medical Simulation is providing state of the art, immersive training which uses emerging VR and AR technology to tackle the global healthcare worker shortage head-on. The team has already achieved some fantastic results – as seen in the company’s growth momentum and the quality of its customer base. It is, quite rightly, a demanding customer base, but they have shown the potential to ensure we all have access to highly trained healthcare professionals in the future.

Dr Nicolaus Henke adds: “Michael and his team are transforming the way healthcare training is delivered and experienced. Virtual simulation creates a better and more immersive training experience for learners, while at the same time freeing up very experienced senior nurses and doctors for important clinical and education leadership tasks.  Not only do I see a broad market need for this technology in clinical education and training, but the opportunity to create a higher quality, more engaging training experience will be of enormous benefit to wider society”.

Heura Lays Groundwork For Europe’s Largest Series B Round In The Plant-Based Industry To Take Place In 2023

• NBA star Ricky Rubio, football players Sergi Busquets and Sergi Roberto, as well as comedian David Broncano invested on the heels of more than 5,000 Good Rebels contributing to one of Europe’s most successful crowd equity rounds.  
• Heura is already the leader in the Spanish market, with 80%1 of plant-based category growth credited to Heura sales, and the company is slated to end the year with 30% market share, as it expands its vision across Europe. 
• Heura continues to see more than 100% YOY growth, as recent reports show that most (60 percent) meat won’t come from animals by 20402, and the plant-based food market is expected to hit 162 billion USD in 20303. 

London, October 25, 2022 – Heura, Europe’s fastest growing plant-based food tech start-up, today announced a new €20M funding round, including issuance of convertible notes that lead to equity in what’s anticipated to be one of 2023’s largest Series B rounds in Europe in the alternative proteins industry. A symbol of support for the 21st century food transformation, the investment round included contributions from NBA star Ricky Rubio, football players Sergi Busquets and Sergi Roberto, comedian David Broncano, as well as Unovis Capital. 

“Having mission-driven investors on board who dare to take bold action to accelerate the plant-based protein transition gives us the resources to continue driving category growth across Europe,” said Food Activist, CEO and Heura Co-Founder Marc Coloma. “We have a clear vision, and this new funding will help us transition from a successful Spanish plant-based company, to a net positive food-tech startup that’s leading the protein transition across Europe. This growth path is designed to bring us into 2023 in position to close the largest Series B rounds in the industry, and usher in a future that’s better for the people, planet and animals.” 

With new funding in hand, a primary focus for Heura will be positioning itself as the European plant-based leader by 2027. It will be  expanding its animal ‘meat successors’ in current countries, like France, Italy and the UK, and new European regions, including Austria, Germany, Switzerland, the Netherlands and more. It’s on track to launch breakthrough new technologies and innovations in new segments, filing its first patents in November 2022, with the focus on delivering new foods in 2023 that are nature-positive, nutrient-dense and achieve culinary excellence. Clear communications of the benefits of the protein transition coupled with bringing more people together to vote with their fork will help lead the way in Heura’s growth across the continent.

The investment round began earlier this year with Heura raising more than €4M in just 12 hours through its crowdfunding Equity for Good Rebels campaign, which saw more than 5,000 people from across the world join together for a common cause. Breaking traditional investor norms, approximately half of the participants were between the ages of 18 – 35 years old, and 42% identified as women.  

The momentum for Heura has been non-stop with the company nearly doubling its H1 2022 turnover. Mid-year, it had reached €14.7 million in turnover, up from €7.6 million during this period last year. With its most successful first half of the year in its five-year history, Heura entered major retailers including Ocado in the UK, Migros in Switzerland, Carrefour in Italy, E.Leclerc, Intermarché and Super U in France, and more. New partnerships with major European retailers will be announced later in the year, as well as details on the company’s triple digit growth. 

As a purpose-driven company, Heura is immensely proud of the positive impact it will continue to build on, both for the environment and animal welfare. The first half of the year alone, when compared to traditional proteins, Heura estimates it has saved approximately 55.9 million liters of water used and 3.6 million kg of CO2, as well as sparing 509,000 chickens, pigs and cows lives. Always looking to improve, the company’s ultimate aim is to redefine the entire food system and make changes across the whole value chain to move from carbon neutral to climate positive. 

By Anshuman Daga and Lawrence White

SINGAPORE (Reuters) -Standard Chartered’s third-quarter profit surged 40% as higher interest rates boosted the emerging markets-focused bank’s income, giving it ammunition to upgrade its revenue outlook despite a weakening global economy.

StanChart, which earns most of its revenue in Asia, raised its income growth forecast for this year to 13% from 10% previously and CEO Bill Winters said the bank was confident of delivering its 2024 financial targets.

Its Hong-Kong listed shares rose 2.7% while its London-listed shares were flat in early trade.

“Our performance this year has been strong, and the pace of economic recovery in many of our footprint markets is encouraging, notwithstanding increasing recessionary pressures in certain Western markets,” Winters said.

The results came a day after larger peer HSBC reported a 42% drop in quarterly profit on Tuesday — due to loan losses and charges from the sale of its French business — and surprisingly named a new CFO, souring investor confidence.

StanChart’s performance also contrasted with those of U.S. banks, which earlier this month reported weaker profits as they raised provisions against expected loan losses and saw market volatility choke off dealmaking.

The profit growth and improved guidance from the London-headquartered lender showed how rising interest rates are lifting some banks’ profits, even as the global economy struggles amid volatile energy costs and the impact of the Russia-Ukraine war.

The bank said statutory pre-tax profit rose to $1.39 billion in the three months to Sept. 30 from $996 million a year earlier and versus the $1.05 billion average estimate of 14 analysts, as compiled by the bank.

Analysts said the profit increase was helped by a strong performance from the lender’s transaction banking unit, which manages cash for corporate clients and saw income up 47%. The bank’s underperforming wealth management business had another weak quarter however, with income down 19% as weak stock markets left rich clients with little appetite to invest.

RESTORING GROWTH

Winters, who took charge seven years ago, has tried to restore growth while building a portfolio of digital assets in recent years, after repairing the bank’s balance sheet and slashing thousands of jobs early in his tenure.

StanChart, present in 59 markets with 85,000 staff, mainly relies on capturing trade flows between its key markets of Asia, Africa and the Middle East but it lacks the heft of larger rivals in commercial banking and investment banking.

Still, the company’s London-listed shares have shed about 45% during his reign, though they have risen about 24% so far this year and outperformed peers.

In July, StanChart cheered investors with improved payouts to shareholders and a $500 million share buyback.

Central banks around the world have been tightening monetary policy this year to contain mounting inflation.

Rising rates traditionally buoy bank profits as they can make more from lending than the sums they pay to savers, but the current picture is clouded by the threat of an economic downturn that could cause hefty losses for lenders.

StanChart said the outlook for China’s real estate sector remains “challenging” and it expected a “protracted recovery.” It said it had minimal exposure to mortgages on buildings under construction.

The bank has a $3.5 billion exposure to China’s real estate sector, which has been beset by multiple headwinds after regulators clamped down on excessive borrowing since mid-2020.

StanChart’s statutory credit impairment charges more than doubled to $227 million in the latest quarter from a year earlier. The charges includes $130 million for exposure to China real estate, among others.

(Reporting by Anshuman Daga and Lawrence White; Editing by Ana Nicolaci da Costa)

A global recession is coming in 2023 and you should act now to protect your investments, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.

Nigel Green of deVere Group is speaking out as a growing number of institutions and investors sound the alarm.

He says: “In recent weeks the chorus of warnings about an imminent global recession has been getting ever louder.

“From the World Bank, the World Trade Organization, and the World Economic Forum, to the IMF and even Elon Musk, the consensus is growing that the world economy will fall into recession in 2023.”

There are various signs that are indicating a global recession is on its way.

“The strength of the dollar is one major indicator. It’s seen as a safe haven in turbulent times for investors. However, it also creates major issues for most other countries as it becomes more expensive to import.

“In addition, a strong dollar can be bad for Wall Street as many listed firms earn a good chunk of their profits outside the U.S,” says the deVere CEO.

“Inflation is another.  As it continues to run red-hot, households and firms have less money to spend on goods and services. Financial habits are adjusted and downsized, which drags on economic growth throughout the wider economy.

“Also, corporations around the world are tightening their belts and suggesting earnings will be lower, as demand drops, supply chain issues remain, and borrowing gets more expensive as central banks, determined to control inflation, raise interest rates.”

How to protect your portfolio during a global recession?

“There will be opportunities not only to protect but to grow your wealth, despite a recession,” affirms Nigel Green.  “You’ve just got to be extra savvy.”

As the risks of a global recession ramp up, there remains one clear way for investors to maximise returns relative to risk: the time-honoured practice of portfolio diversification. 

“A considered mix of asset classes, sectors, regions and currencies offers you protection from shocks. A good fund manager will help you sidestep potential risks.”

He continues: “You should take a look at stocks that are likely to be recession-resistant.  For example, people will still need food, energy and financial services during a downturn. These sectors should do well.

“Seek out more undervalued, quality stocks – look for robust balance sheets, good future-focused outlooks and steady profits.

“In addition, in an environment of rising inflation and interest rates, less familiar, return-enhancing asset classes should also be considered.”

These might include venture capital, structured products, cryptocurrencies, high-dividend stocks, hedge funds and managed futures.

The deVere CEO concludes: “Recessions are always painful – and a global one is expected to come next year.

“But they can also be times of opportunity if you stay fully and wisely invested.

“One silver lining about this one is that we know it’s coming, so we can prepare to protect our money ahead of time.”

By Alexander Hübner and Joice Alves

BERLIN/LONDON (Reuters) – Shares in Puma fell 1.75% on Wednesday after the company confirmed its full-year guidance but flagged uncertainty in the global market.

The German sportswear maker reiterated its full-year operating result and sales outlook, after what it said was the best third quarter in its history.

“We expect continued volatility in the market during the fourth quarter but are confident that we can deliver according to our full-year outlook,” said Puma Chief Executive Bjorn.

The company said its earnings before interest and taxes (EBIT) rose by 12.6% on the year to 258 million euros ($257 million) while third-quarter sales rose a currency-adjusted 16.9% to 2.35 billion euros ($2.34 billion).

“Improved product availability due to a more stable supply chain, better than expected sell-through and Puma’s continued global brand momentum overcompensated all the negative external factors,” Gulden said.

Despite continued effects of COVID-19-related lockdown measures in China, Puma saw sales growth in the Asia/Pacific region in the third quarter, it said.

The company expects currency-adjusted sales growth of around 15% and an EBIT between 600 and 700 million euros for 2022.

Jefferies equity analysts said Puma’s results have proven resilient “in a worsening industry contest” after recent profit warnings from competitors Nike and Adidas highlighting excess inventories across the industry.

Last week, German sporting goods maker Adidas cut its full-year guidance, citing weaker expectations for China, lower demand in major Western markets and one-off expenses related to its exit from the Russian market.

($1 = 1.0029 euros)

(Reporting by Alexander Huebner and Joice Alves, Writing by Miranda Murray, editing by Paul Carrel and Bernadette Baum)

By Lawrence White, Sinead Cruise and Anshuman Daga

LONDON/SINGAPORE (Reuters) -Georges Elhedery’s appointment as HSBC’s chief financial officer caps a journey that’s taken him from war-torn Lebanon to frontrunner for the top job at Europe’s biggest bank. It’s also surprised investors and raised questions about HSBC’s direction.

Known at HSBC for his strategic vision more than for his accounting skills, Elhedery has climbed the ranks of HSBC’s investment bank since joining in 2005. With his latest promotion the 48-year-old is just one step away from the top role.

“It was a surprise to us,” said Hugh Young, Asia chairman of Aberdeen Standard Investments, one of HSBC’s top 25 shareholders. CEO Noel Quinn has done a good job but investors are impatient for faster progress, Young said.

Elhedery’s move to CFO comes at a difficult juncture for HSBC. Since Quinn formally took over as CEO in March 2020, HSBC shares have dropped nearly 10%, and the company has been caught up in political tensions between the West and China.

The bank is under pressure from its biggest investor Ping An to explore options, including listing its Asia business, a move that HSBC has rebuffed.

The bank’s performance isn’t helping.

HSBC’s profits slid 42% in the third quarter as bad loans rose in the face of a darkening global economic outlook.

The bank also alarmed investors by cutting its 2023 forecast for net interest income despite a benign interest rate environment, sending its shares nearly 7% lower on Tuesday.

HSBC declined to comment for this article, as did Elhedery through an HSBC spokesperson.

Quinn earlier told Reuters: “There is no change in strategy as a consequence of these leadership changes.” He said the London-headquartered bank had succession in mind.

Under CFO Ewen Stevenson, HSBC has been trying to improve profitability by exiting business and cutting costs, a task some questioned whether Elhedery would be most adept at.

One person familiar with Elhedery said he was a skilled operator but might lack the accounting expertise typically associated with the CFO role. Elhedery’s strengths were much more in strategy and people management, another source said.

Analysts too expressed surprise at the jettisoning of Stevenson, seen as a safe pair of hands who had steered the bank through a period of restructuring as it tried to cut costs and trim its businesses around the world.

“It’s very disappointing to hear that Ewen is stepping down, he has had a transformational impact on HSBC’s cost discipline, bringing much-needed credibility to its financial targets and execution,” said Ian Gordon, analyst at Investec.

CIVIL WAR

Born in Beirut during Lebanon’s civil war that split its capital city into Christian East and Muslim West, Elhedery grew up with a retail banker father and teacher mother, based on past interviews he has given.

Elhedery moved to Paris to study engineering at the École Polytechnique and took a postgraduate degree in statistics and economics.

He began his career in banking as a rates trader, joined HSBC in 2005 in the Global Banking and Markets division, and rose through the ranks.

In 2016, he took over the Middle East, North Africa and Turkey region managing 10,000 staff across all the bank’s business lines and overseeing risk, financial crime, compliance and capital management.

In 2020, he became co-head of the Global Banking and Markets business, the division which houses HSBC’s trading and investment banking advisory businesses, taking over from fellow Lebanese-born, Paris-educated banker Samir Assaf.

He surprised colleagues at HSBC this year by announcing a sabbatical, characterised at the time as a break to spend time with his family and recharge his batteries.

This came as executives were moving to Hong Kong, as part of a wave of relocations by HSBC of senior roles to the bank’s biggest market.

His co-head of the investment bank Greg Guyett was left in sole charge of the business. On his return this September Elhedery said he would focus on working on projects with CEO Quinn.

A regular fixture at the bank’s Diversity and Inclusion events, according to one person, Elhedery has been seen taking equal interest in the needs of junior staffers as much as senior ranks.

He runs 10 kilometres before work every day, according to one of his former employees. That says everything about the kind of man he is, this banker told Reuters.

(Reporting By Lawrence White, Sinead Cruise and Anshuman Daga, additional reporting by Pamela Barbaglia. Editing by Jane Merriman)

By Sheila Dang and Eva Mathews

(Reuters) -Google parent Alphabet Inc’s disappointing ad sales sparked worries across the digital media sector on Tuesday as advertisers cut back on their spending in the face of an economic slowdown.

Alphabet called out slowing spending by advertisers on YouTube, said financial services spending was cooling on Google, and plans to cut hiring by more than half.

The negative results shattered many expectations that Google, which is the world’s largest digital advertising platform by market share, would remain strong in a weakening economy and reinforced worries on Wall Street that inflation will continue to hurt advertising spending. Last week, smaller rival Snap Inc’s slowest-ever revenue growth rate sent inflation fears through tech sector and temporarily wiped out $40 billion in market capitalization.

Shares in Alphabet fell 6.5% in trading after the bell.

Alphabet’s weak results raises concerns for other companies in the sector, especially advertising-dependent Meta Platforms. The Facebook parent, which reports results on Wednesday, saw shares drop 4.5% on Tuesday.

Ruth Porat, Alphabet’s chief financial officer, said the deceleration in overall advertising revenue was due to last quarter’s “very strong performance,” adding that lower ad sales on YouTube were due to some advertisers pulling back on their ad spending.

Companies that slowed ad spending included those in financial services such as insurance, mortgages and cryptocurrencies, Alphabet said. Travel and retail advertisers helped Google Search ad revenue.

Google’s advertising revenue was $54.48 billion in the third quarter, compared with $53.13 billion last year but came in below analysts’ expectations.

The company said total revenue was $69.09 billion in the quarter ended Sept. 30, compared with $65.12 billion a year earlier.

Analysts on average expected revenue to be $70.58 billion, according to Refinitiv data.

“Google’s earnings miss this quarter proves it’s not immune to the challenges facing the digital advertising industry at large,” said Jesse Cohen, senior analyst at Investing.com.

The speed of the slowdown also shocked investors who are “highly sensitive to the changing tide,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

Ad sales on streaming video site YouTube also declined to $7.07 billion, from $7.2 billion in the prior-year quarter.

Alphabet’s net income fell to $13.91 billion, or $1.06 per share, from $18.94 billion, or $1.40 per share, a year earlier. Net income missed analyst expectations of $1.25 per share.

The company’s operating margin declined to 25% in the third quarter, from 32% in the prior year.

The tech giant said in July it would slow the pace of hiring for the rest of the year, saying it was “not immune to economic headwinds.” Porat said the company hired 12,700 people in the third quarter and expects to hire less than half that number in the final quarter.

Revenue from Google Cloud rose to $6.9 billion during the quarter, from $5 billion a year earlier.

During a conference call with analysts, Alphabet Chief Executive Sundar Pichai said the company would continue to evaluate its projects and make “course corrections” as needed. “Times like this are clarifying,” he said.

(Reporting by Eva Mathews in Bengaluru and Sheila Dang in Dallas; Editing by Anil D’Silva and Lisa Shumaker)