Proactive Investors -
- FTSE 100 see saws around opening levels
- Barclays rises after results beat forecasts
- AstraZeneca, Unilever firm after upbeat trading
AstraZeneca rises after quarter-one beat
Another share on the rise is AstraZeneca PLC (LON:AZN) which reported first-quarter numbers today.
Just over £4bn was added to the value of the pharma giant, whose shares opened 2.25% higher after the company reported better-than-expected first-quarter profit and revenue.
Adjusted earnings of $1.92 per share on sales of approximately $10.9 billion, outpaced the average analyst estimate of $1.71 per share on sales of around $10.6 billion.
CEO Pascal Soriot attributed the solid performance to the company's robust sales in emerging markets, which grew 22% to $3.1 billion on a constant currency basis, excluding COVID products.
Shore Capital analyst Dr. Sean Conroy said: “Tagrisso came in-line but a notable beat from Imfinzi, which included first Imjudo sales, offset some misses from Lynparza and Calquence to bring Oncology in line overall.”
He noted the company delivered its third consecutive quarter of growth in China which he felt should be well received.
Meanwhile, the FTSE 100 has dipped into the red, now down 11 points.
FTSE 100 hovers around opening levels
The FTSE 100 hovered around its opening levels in early exchanges as strong results from Barclays and positive noises from other leading lights of the UK's business world helped to allay nervousness surrounding the global banking sector.
At 8.15am London's lead index was 3 points higher at 7,855.67 while the FTSE 250 fell to 19,168.14, down 39.83 points, or 0.21%.
Gains were limited by ongoing concerns surrounding the US banking sector after further falls in First Republic Bank (NYSE:FRC) on Wednesday although technology stocks continue to perform strongly after strong results from Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Meta Platforms (NASDAQ:META).
Deutsche Bank noted: “There’s been a bit of a tug-of-war in markets over the last 36 hours between the dominance of US tech pulling aggressively on one side against the still shaky foundations of US regional banks on the other.”
“Meta's positive after the bell earnings have helped again overnight but the battle is set to continue,” the investment bank said.
Some of those nerves in the banking sector may be soothed by better-than-expected results from Barclays supported by strong growth in its UK business and credit card business which offset a flat performance in its investment banking arm. Shares rose 1.5%.
Shore Capital analyst Gary Greenwood said “Barclays remains the most undervalued of the large UK banks, in our view,” keeping a buy rating.
He said: “Earnings beat consensus primarily due to better-than-expected income generation from the Group’s Corporate & Investment Banking (CIB) operations, albeit partly offset by commensurately higher than expected costs.”
Elsewhere, Unilever jumped 1.7% after reporting underlying sales growth accelerated to 10.5% to €14.8bn in the first quarter with growth broad-based.
But J Sainsbury was little changed despite reporting top-end full year profit.
Sophie Lund-Yates at Hargreaves Lansdown) said: "Attracting customers with low prices now could be the right move for the long-term as it can encourage switching from rivals. However, the degradation in margin can’t go on forever and profits are already feeling the pinch."
Sainsbury unveils top-end annual profit
J Sainsbury PLC (LON:SBRY) has reported full year pre-tax profit of £690mln, down 5% year-on-year, but at the top end of the £630mln to £690mln range guided by the company in January.
Retail sales rose 5.2%, and excluding fuel sales were up 2.0%.
For the coming year, the food retailer expects pre-tax profit between £640mln to £700mln and continues to expect to generate at least £500mln of retail free cash flow.
Underlying EPS was 23.0p, down 9%, while a final dividend of 9.2p, gave a full-year payout of 13.1p.
Sainsbury's said the outlook for consumer spending remained uncertain but it had started the new financial year "with great momentum."
Unilever first quarter sales climb 10.5%
Unilever PLC (LON:ULVR) reported underlying sales growth accelerated to 10.5% to €14.8bn in the first quarter with growth broad-based.
Strongest sales growth came in Personal Care, up 12.7%, while Home Care and Nutrition rose 10.2% and 11.9% respectively. More modest advances were seen in Beauty & Wellbeing and Ice Cream up 9.3% and 6%.
The owner of Ben & Jerry's and Dove brands said price growth remained elevated at 10.7%, with an improved quarter-on-quarter volume performance at negative 0.2%.
The group’s billion+ Euro brands, accounting for 54% of turnover, delivered underlying sales growth of 12.1%, led by strong performances from OMO, Hellmann's, Rexona, and Lux.
Looking ahead, the firm expects inflation of around €1.5 billion in the first half and significantly lower inflation in the second half, with a wide range of possible outcomes although it does not expect cost deflation.
“We now expect underlying sales growth for the full year 2023 to be at least at the upper end of our multi-year range of 3 - 5%,” Unilever said.
Underlying price growth will remain high in the first half and soften through the year while underlying operating margin in the first half will be at least 16% with a modest improvement in underlying operating margin in the full year.
Chief Executive Alan Jope said: “We remain focused on navigating through continued macroeconomic uncertainty and are confident in our ability to deliver another year of strong growth, which remains our first priority."
Unilever held its quarterly interim dividend at EUR0.4268.
Barclays tops expectations
Barclays PLC (LON:BARC) reported better than expected first quarter pre-tax profit supported by strong growth in its UK business which offset a flat performance in its investment banking arm.
The high street lender said pre-tax profit in the three months to March 31 reached £2.60bn, up 16% from £2.23bn a year ago, and above the company compiled consensus of £2.2bn.
Group income was £7.2bn, up 11% year-on-year, while EPS rose to 11.3p from 8.4p.
Barclays UK income increased 19% primarily driven by net interest income growth from higher rates and continued structural hedge income momentum, delivering a net interest margin (NIM) of 3.18%.
The FTSE 100-listed lender expects NIM to be greater than 3.2% in 2023, in line with previous guidance.
But Corporate and Investment Bank income only increased 1% to £4.0bn, although this was still a record first quarter income performance.
Drivers included a strong performance in Transaction banking and Global Markets, against a record prior year comparative, with lower Investment Banking income due to a reduced industry fee pool.
Consumer, Cards and Payments income increased 47% from growth in US cards balances while group operating expenses were £4.1bn, in line with prior year, including the non-repeat of certain litigation and conduct items.
Credit impairment charges were £0.5bn, with a loan loss rate (LLR) of 52bps, within the guided range of 50-60bps, reflecting higher US cards balances and the continuing normalisation anticipated in US cards delinquencies.
The CET1 ratio dipped to 13.6% from 13.9% at the end of 2022 while tangible net asset value per share of 301p, increased 6p since December 2022.
The bank is targeting a return on total equity of greater than 10% in 2023 and said its diversified income streams continue to position it well for the current economic and market environment including higher interest rates.
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