Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The following is a summary of top news stories Friday.
----------
COMPANIES
----------
Apple reported a rise in earnings for the second quarter of its financial year, as revenue continued to exceed record levels through higher iPhone and Mac sales. For the three months ended March 26, the Cupertino, California-based technology colossus reported net income of $25.01 billion, up 5.8% from $23.63 billion the same period a year before. Diluted earnings rose 8.6% to $1.52 from $1.40. This was on total net sales which grew 8.6% year-on-year to $97.28 billion from $89.58 billion, driven by a 5.5% rise in iPhone sales to record levels of $50.57 billion, as well as a 15% increase in Mac sales to $10.44 billion, which was also an all-time high.
----------
Amazon suffered a first-quarter loss as the e-commerce company took a hit from its investment in electric vehicle maker Rivian Automotive. For the three months to March 31, net sales were down to $116.44 billion from $108.52 billion in the first quarter last year. Amazon swung to a first-quarter net loss of $3.84 billion, or loss per share of $7.56, from a profit of $8.11 billion, or $15.79 EPS, last year. The first quarter net loss includes a pretax valuation loss of $7.6 billion included in non-operating expense from the common stock investment in Rivian Automotive.
----------
Intel reported a more than doubled profit for the first quarter of 2022, through on sharp gains on equity investments which more than offset a decline in revenue. For the three months ended April 2, the US chipmaker posted a net income of $8.11 billion, up sharply from $3.36 billion the same period a year before, mainly attributed to a $4.32 billion gains on equity investments. In addition, GAAP earnings per share more than doubled to $1.98 from $0.98, in spite of revenue which dropped 7% year-on-year to $18.35 billion from $19.67 billion, as a 13% decline from Client Computing through the ramp down of Apple CPU and modem business more than offset record revenue performances in Network & Edge, Mobileye and Intel Foundry Services.
----------
NatWest posted a strong rise in profit in the first quarter as the bank boasted of its capital strength and said it is confident of securing income well above £11.00 billion in 2022 in its core operations. In the three months to March 31, the Edinburgh-headquartered bank recorded an operating pretax profit of £1.25 billion, surging 41% from £885 million in the same period a year prior. Attributable profit rose 36% to £841 million from £620 million. NatWest booked a £38 million credit provision release in the first quarter, down from a £98 million release a year earlier. While not a considerable sum, the release is in stark contrast to its blue chip peers, who reported this week that they are beginning to build credit reserves to deal with potentially slowing economic growth. NatWest - formerly Royal Bank of Scotland - saw total income rise 17% to £3.03 billion from £2.59 billion. Net interest income rose to £2.05 billion from £1.86 billion, while non-interest income increased to £982 million from £727 million.
----------
Separately, Dublin-based bank AIB said it has agreed with NatWest to buy about €6 billion Ulster Bank performing tracker mortgages. AIB also noted it has received approval from Irish regulators for its previous acquisition of about €3.7 billion Ulster Bank performing corporate and commercial loans from NatWest.
----------
Reckitt Benckiser reported a small fall in revenue in the first quarter of 2022; however it said it expects 2022 like-for-like net revenue growth at the upper end of its guidance. The Slough, England-based consumer goods firm reported that net revenue in the first quarter fell 2.3% year-on-year to £3.42 billion from £3.51 billion. On a like-for-like basis, it was up 5.6%. Reckitt Benckiser explained that growth had been broad-based across the business in the quarter, with brands less sensitive to Covid dynamics growing at high single-digit percentage rates. In the company's Hygiene arm, revenue fell 9.0% on a like-for-like basis to £1.47 billion, though like-for-like Nutrition revenue surged 20% to £557 million and Health revenue jumped 21% on the same basis to £1.40 billion.
----------
AstraZeneca reported a sharp rise in first-quarter revenue, though profit declined, and the drugmaker also announced plans for a new R&D site in the US. Quarterly pretax profit shrank 66% to $553 million from $1.61 billion a year ago. Revenue rose by 56% to $11.39 billion from $7.32 billion. Revenue from its oncology arm grew by 21% to $3.64 billion from $3.02 billion. AstraZeneca completed its $39 billion takeover of Boston-based rare diseases firm Alexion Pharmaceuticals in July last year, helping to boost its top line. In the quarter, AstraZeneca generated $1.09 billion in sales from its Covid-19 vaccine Vaxzevria, ups sharply from a year prior. Contracts with the vaccine are expected to complete delivery by the second half of the year, the firm added. Astra backed annual guidance. It tips revenue to rise ‘by a high teens percentage’ and core EPS to climb by a ‘mid-to-high twenties percentage’. AstraZeneca unveiled plans for a new site that aims to both house the new Alexion headquarters and a new strategic research & development centre at Kendall Square in Cambridge, Massachusetts.
----------
Generic drug maker Hikma Pharmaceuticals raised guidance for its key Injectables business due to the contribution from its acquisition of Custopharm. Back in September, Hikma agreed to buy the California-based generic injectable products company for a total of up to $425 million. The deal added up to 13 approved products to Hikma's portfolio. The company said it now expects Injectables revenue growth in mid-to-high single digits in 2022, up from previous guidance of low-to-mid single digits. Generics revenue is expected to grow by 8% to 10% in 2022, while Branded revenue is expected to be in line with 2021.
----------
Oil major BP will partner with German automaker Volkswagen to ‘boost’ adoption of electric vehicles across Europe. The pair plans to ‘rapidly’ build fast-charging EV network across Europe by 2024. ‘Volkswagen's innovative Flexpole 150,000 watts charging units, each of which features two charge points, have an integrated battery storage system, overcoming one of the biggest obstacles to the rapid roll-out of fast charging infrastructure in Europe today the need for high-powered grid connections,’ VW explained. First phase of the roll-out will see up to an additional 4,000 charge points at BP's Aral retail sites in Germany and BP retail sites in the UK over the next 24 months. The paid hope to make 8,000 charge points available across Europe by end of 2024.
----------
BASF said first-quarter profit was hit by Russia-related impairment charges, despite healthy growth in sales. The Ludwigshafen, Germany-based chemical company said that, in the first quarter, sales grew 19% year-on-year to €23.08 billion from €19.40 billion. This was mainly driven by higher prices, notably in the Chemicals and Materials segments, which was somewhat offset by slightly lower sales volumes, BASF said. Earnings before interest and tax rose 19% to €2.8 billion, but pretax profit dropped 16% to €1.88 billion from €2.25 billion in the first quarter of 2021. The drop was due to impairment charges from Wintershall Dea, which caused a decline in income from shareholdings of €1.1 billion. The charges were caused by the war in Ukraine, and concerned assets in Russia and the gas transportation business.
----------
Educational materials publisher Pearson provided a positive update on first quarter trading, while also announcing a new acquisition. Pearson has agreed to buy Mondly, an online language learning platform. It provided no financial details, but said it expects the purchase to accelerate revenue growth for its English Language Learning division from 2023 onward. It expects mid-teens margins for the division by 2025. Turning to its own recent trading, Pearson reported underlying sales growth of 7% in the first quarter. It reaffirmed its guidance for adjust operating profit in 2022. Pearson added that its £350 million share buyback programme has begun, with £75 million already completed.
----------
Smurfit Kappa reported first quarter earnings growth despite headwinds at the start of 2022. The packaging firm reported year-on-year revenue growth of 33% to €3.02 billion in the first quarter of 2022, with earnings before interest, tax, depreciation and amortisation rising at the same rate to €514 million. Its Ebitda margin was flat at 17% despite inflationary pressures in the period.
----------
MARKETS
----------
Stock markets on Friday were ending a volatile month of April on a positive note, amid a continued rush of company earnings. Frankfurt and Paris were outperforming London, despite a 'stagflation' combination of economic data.
‘For the ECB, the continued albeit slowing economic growth means that it is likely to act sooner rather than later,’ comments Bert Colijn, eurozone senior economist at ING. ‘The central bank seems keen to battle second-round effects and keep inflation expectations anchored around 2%. While the economy remains weak and this definitely is not an environment in which the ECB can hike as much as the Federal Reserve, dont expect the ECB to wait much longer’ to hike interest rates.
----------
CAC 40: up 0.8% at 6,560.13
DAX 40: up 1.0% at 14,117.08
FTSE 100: up 0.2% at 7,520.79
----------
Hang Seng: closed up 4.0% at 21,089.39
Nikkei 225: Tokyo market closed for holiday
S&P/ASX 200: closed up 1.1% at 7,435.00
----------
DJIA: called down 0.3%
S&P 500: called down 0.6%
Nasdaq Composite: called down 1.0%
----------
EUR: up at $1.0574 ($1.0524)
GBP: up at $1.2567 ($1.2458)
USD: down at JP¥130.43 (JP¥131.00)
Gold: up at $1,915.21 per ounce ($1,887.75)
Oil (Brent): up at $108.98 a barrel ($106.55)
(currency and commodities changes since previous London equities close)
----------
ECONOMICS AND GENERAL
----------
The eurozone's economy grew at a slower pace than expected in the first quarter of 2022, according to numbers on Friday, while separate data showed inflation picked up slightly in April. According to Eurostat, eurozone gross domestic product grew 0.2% quarter-on-quarter in the first three months of 2022. The figure fell short of an FXStreet cited estimate of 0.3% growth. In the fourth quarter of 2021, GDP had expanded by 0.3%. Annually, first quarter economic growth from the single currency area was 5.0%, accelerating from the fourth quarter's 4.7% rise. Annual growth came in line with FXStreet cited consensus.
----------
Separate figures from Eurostat showed inflation accelerated to another record high in April, as expected. The eurozone annual inflation rate for April was 7.5%, an uptick from 7.4% in March. The April figure was in line with FXStreet cited consensus. On a monthly basis, consumer prices grew 0.6%.
----------
The German economy expanded at a greater pace than expected in the first three months of 2022. According to Destatis, Europe's largest economy grew by 0.2% quarter-on-quarter in the first quarter of 2022. Growth topped an FXStreet cited estimate of a 0.1% climb. In the fourth quarter of 2021, Germany's economy shrank by 0.3%. Adjusting for price and calendar effects, German GDP was 4.0% higher year-on-year in the first quarter, quickening from a 1.8% hike in the fourth quarter of 2021. First-quarter GDP was 0.9% lower than three years earlier, before the onset of the pandemic.
----------
Producer inflation in Australia was 4.9% on an annual basis in March, accelerating from 3.7% annually when figures were last reported in December, new data showed. Producer prices saw the strongest annual increase since December 2008. Prices for producers increased 1.6% from December, increasing from than the 1.3% quarterly rise in December from September. The key factors driving the rise were price increases in construction materials and crude oil, as well as shortages in skilled trade, the Australian Bureau of Statistics said.
----------
Annual UK house price growth slowed slightly in April but remained robust, according to figures from mortgage lender Nationwide. UK house prices rose 12% year-on-year in April, slowing from March's 14% climb. ‘Nevertheless, this is the 11th time in the past 12 months that the annual growth rate has been in double digits,’ Nationwide analyst Robert Gardner commented. On a monthly basis, the average UK house price climbed 0.3% to £267,620, from £265,312. In March, prices had risen 1.1% monthly. Gardner added: ‘Housing market activity has remained solid with mortgage approvals continuing to run above pre-Covid levels. Demand is being supported by robust labour market conditions, where employment growth has remained strong and the unemployment rate has fallen back to pre-pandemic lows.’
----------
Ukrainian President Volodymyr Zelensky welcomed further US financial support as a ‘very important step’. Zelensky thanked both US President Joe Biden and the American people for their help, expressing hope that the US Congress would ‘quickly support’ the $33 billion boost. ‘President Biden rightly said today that this step is not cheap,’ Zelensky said in his daily video address. ‘But the negative consequences of Russia's aggression against Ukraine and against democracy are so large-scale for the whole world that, in comparison with them, this support from the US is necessary. Together, we can certainly stop Russian aggression and reliably defend freedom in Europe.’ Of the latest sum, $20 billion would be used for military aid while $8.5 billion would be provided for economic aid. The US has pledged or already delivered weapons and ammunition worth more than $3.7 billion to Ukraine since Moscow's attacks began in late February.
----------
UN Secretary General Antonio Guterres was shocked by blasts during a visit to Kiev, where he went to the site where atrocities were committed and discussed humanitarian efforts with Zelensky. ‘In the evening, the enemy shelled Kiev: Two explosions in the Shevchenkivskyi district,’ Kiev Mayor Vitali Klitschko said on Telegram. A residential building was hit and six people were injured, according to the Ukrainian disaster control organization. Pressure is growing on Guterres to assume a more active role in resolving the conflict. Attempting to help broker a peaceful solution to the war, he visited Russian President Vladimir Putin and Foreign Minister Sergei Lavrov in Moscow earlier this week and demanded that humanitarian corridors be set up for civilians.
----------
Copyright 2022 Alliance News Limited. All Rights Reserved.