Stocks Pare Gains Amid Stimulus Prospects – Wall Street Journal, 4/29/2021

• U.S. stocks pared gains Thursday as investors analyzed encouraging data on the economy, a strong batch of corporate earnings and the prospect of as much as $1.8 trillion in new government spending.
• The Dow Jones Industrial Average was roughly flat in morning trading, while the S&P 500 gained 0.2% and the Nasdaq Composite declined 0.2%. If the S&P maintains its modest gains to the closing bell, it would end the day at a fresh record.
• The morning provided investors with fresh signs of the economy’s recovery.
• The U.S. economy grew at a 6.4% rate in the first quarter, approaching its pre-pandemic size, and weekly jobless claims fell to their lowest level since the pandemic began last year.
• A fresh boost could come in the form of a new federal stimulus program. President Biden outlined proposals on Wednesday for his new American Families Plan, which would boost spending on child care, education and paid leave.
• Investors’ optimism was also buoyed after Federal Reserve Chairman Jerome Powell said the central bank would continue supporting the economy, while noting signs that growth has revived and the labor market is strengthening.
• Initial jobless claims, a proxy for layoffs, reached 553,000 for the week ended April 24. That is the lowest level since the pandemic began more than a year ago, but was above forecasts from economists polled by The Wall Street Journal.
• Earnings season remains under way, with Amazon.com and Twitter slated to post results after market hours. In early trading, Amazon gained 0.8% and Twitter rose 0.3%.
• In bond markets, the yield on the benchmark 10-year Treasury note jumped to 1.676%, from 1.621% on Wednesday.
• Yields rise when bond prices fall.
• Overseas, the pan-continental Stoxx Europe 600 rose 0.2%. Among European equities, Nokia rallied 11% after the telecommunications company’s earnings beat expectations, driven by sales of 5G network equipment.
• The Shanghai Composite Index advanced 0.5%, and Hong Kong’s Hang Seng added 0.8%.

Covid-19 Live Updates: New U.S. Cases Hover Under 60,000 – Wall Street Journal, 4/29/2021

• Newly reported coronavirus cases in the U.S. remained under 60,000 for the fifth consecutive day, as the percentage of people vaccinated continues to rise.
• The U.S. reported 54,026 new cases for Wednesday, according to the latest data compiled by Johns Hopkins University. Wednesday’s figure was up from Tuesday’s total of 50,856, but was below levels seen for most of last week. Not all states report data on new cases daily.
• While infections nationally have been broadly declining, some states are battling fresh surges. Oregon is placing a large portion of the state under new restrictions starting Friday, pulling back on recent reopenings as Covid-19 cases and hospitalizations climb once more.
• U.S. hospitalizations continue to hover above 40,000, with the latest data posted by the Department of Health and Human Services showing 43,079 Covid-19 patients in hospitals across the country. Some 948 Covid-19 fatalities were recorded Wednesday, as the total death toll surpassed 574,300, according to Johns Hopkins data.
• While public-health officials warn the pandemic is far from over, the country is nearing a benchmark of having 40% of adults fully vaccinated.
• The U.S. administered an average of 2.7 million doses a day over the past week, according to a Wall Street Journal analysis of data from the Centers for Disease Control and Prevention. CDC figures show 37.8% of adults have now been fully vaccinated.

Apple Earnings, Revenue Surge – Wall Street Journal, 4/28/2021

• Apple signaled that the historic rise in sales it has achieved during the pandemic is set to continue, addressing a key investor concern as the company reported record revenue in the first three months of the year.
• The Cupertino, Calif. company reported its profit more than doubled to $23.6 billion in the latest quarter as revenue rose 54% to $89.6 billion, far exceeding Wall Street expectations.
• Apple said Mac sales rose 70% to $9.1 billion and iPads increased 79% to $7.8 billion.
• That beat analyst expectations for increases of 27% and 29%, respectively.
• The real engine of 2021 is the latest iPhone: Overall iPhone revenue rose 65% to $47.9 billion. Analysts had expected a 42% rise.
• The addition of faster 5G cellular connections to this year’s phone was expected to help Apple in China, where competitors had beaten Mr. Cook to market with more advanced phones. Greater China sales nearly doubled to $17.7 billion.
• The company also announced a 7% increase to its cash dividend to 22 cents a share and that the board had authorized an increase of $90 billion to an existing share-repurchase program.

Facebook’s Ad Business Drives Surge in Revenue, Following Google’s Act – Wall Street Journal, 4/28/2021

• Facebook’s booming advertising business drove revenue and profit sharply higher, as the company pledged to navigate Apple’s new ad-targeting rules and accelerate investments in e-commerce, mixed reality and tools to help creators make money from their content.
• Advertising revenue, which accounts for the lion’s share of Facebook’s total revenue, rose 46% from a year earlier to $25.44 billion.
• Non-advertising revenue, which includes sales of virtual-reality headsets, more than doubled in the first quarter to $732 million from $297 million a year ago.
• The company said 2.7 billion people world-wide use one or more of the company’s apps daily.
• Facebook said Wednesday it is seeing progress in consumers and businesses using its e-commerce tools and that it will continue such investments.
• The company said it has more than 1 million active shops and that more than 250 million people interact with merchandise every month.
• The company’s profit nearly doubled to $9.5 billion, or $3.30 a share.

Ford Warns Chip Shortage Will Worsen, Posts Highest Quarterly Net Income in Years – Wall Street Journal, 4/28/2021

• Ford Motor posted $3.3 billion in net income—its highest quarterly result in years—but warned the financial toll from the continuing global computer-chip shortage will likely worsen.
• Revenue rose 6% to $36.2 billion.
• The company posted pretax first-quarter profit excluding one-time items of $4.8 billion, or 89 cents a share, easily surpassing the 22 cent average estimate of analysts surveyed by FactSet.
• The result included a $900 million noncash gain from Ford’s investment in electric-truck maker Rivian Automotive.
• Ford said the chip shortage will cut $2.5 billion from adjusted pretax profit this year, the high range of the $1 billion-to-$2.5-billion estimate it provided in February.
• The company said the lack of semiconductors will force it to cut second-quarter production in half, but it expects the situation to improve after June.

EBay forecasts profit below estimates on stiff competition, shares fall – Reuters, 4/28/2021

• EBay’s second-quarter profit forecast came in below market expectations as it faces fierce competition from bigger rivals including Amazon.com for a slice of the pandemic-led online shopping boom, sending its shares down 6%.
• Its revenue rose 40% to $3.02 billion in the first quarter, beating expectations of $2.97 billion, thanks to the surge in online shopping during the COVID-19 crisis.
• The company’s operating margin rose to 27.9% in the quarter, from 26.5% a year earlier.
• EBay said it expected current-quarter adjusted profit in the range of 91 cents to 96 cents per share, below a Refinitiv IBES estimate of $1.02 per share.

Qualcomm sees revenue, profits above estimates as supply chain improves – Reuters, 4/28/2021

• Qualcomm forecast current-quarter sales and adjusted profits above Wall Street estimates, with executives saying they see supply constraints easing as smartphone buyers upgrade to 5G and former Huawei customers migrate to Qualcomm-chip phones.
• For the fiscal second quarter ended March 28, Qualcomm had adjusted earnings of $1.90 per share on sales of $7.93 billion, compared with analysts’ estimates of $1.67 per share on $7.62 billion, Refinitiv data showed.
• For the fiscal second quarter, chip and licensing sales were $6.28 billion and $1.61 billion respectively, versus FactSet expectations of $6.26 billion and $1.35 billion.
• Qualcomm said handset chips sales were $4.07 billion, up 53% from a year ago, compared with a 79% gain in the previous fiscal first quarter.
• Sales of radio frequency chips, which Qualcomm has said will power revenue growth, were up 39% at $903 million, compared to a 157% year-on-year increase.
• Qualcomm forecast adjusted profits with a midpoint of $1.65 per share on revenue with a midpoint of $7.5 billion for its fiscal third quarter ending in June, compared with analysts’ expectations of $1.52 per share on $7.11 billion, according to Refinitiv data.
• For the fiscal third quarter, Qualcomm forecast chip and licensing revenue with a midpoint of $6.05 billion and $1.45 billion, respectively, compared to analysts’ estimates of $5.64 billion and $1.36 billion, according to FactSet data.
• Qualcomm sees the vacuum left by Huawei as “a tremendous opportunity in gaining market share, not just for the short term into fiscal 2022, but also for the longer term and beyond that,” added Qualcomm Chief Financial Officer Akash Palkhiwala.
• On a call with analysts, Qualcomm said sales of its mobile phone chips could grow by $10 billion as Huawei exits the market.

Mastercard profit beats estimates as consumer spending improves – Reuters, 4/29/2021

• Mastercard reported a better-than-expected first-quarter profit on Thursday, as improved overall consumer spending helped offset a steep decline in cross-border payments on its cards.
• Net revenue grew 4% to $4.2 billion from last year, coming in ahead of estimates of $3.99 billion.
• Mastercard’s gross dollar volumes, which represents the dollar value of the transactions processed, rose 8% on a local currency basis from a year earlier to $1.7 trillion.
• Mastercard’s cross-border volume, one of the key measures that track spending on its cards beyond the country of its issue, tumbled 17% on a local currency basis in the first quarter.
• Net income, excluding exceptional items, fell to $1.7 billion, or $1.74 per share, from $1.8 billion, or $1.83 per share, a year earlier.
• Still, profit still came in ahead of estimates. Analysts on average had expected a profit of $1.57 per share, according to Refinitiv IBES data.

Northrop raises annual outlook as results beat on nuclear programs, radar demand – Reuters, 4/29/2021

• Northrop Grumman raised its full-year sales and earnings outlook as the U.S. weapon maker’s quarterly results topped estimates on Thursday, helped by higher demand for its nuclear programs and missile-warning radars.
• Total sales rose 6% to $9.16 billion, beating Wall Street’s estimate of $8.53 billion.
• Sales in Northrop’s space systems business jumped 29% to $2.52 billion and operating income surged 37% to $276 million, aided by the production ramp up of its GBSD intercontinental ballistic missiles and higher demand for Next Gen OPIR missile-warning radars.
• Sales in Northrop’s aeronautics systems unit, which makes the center fuselage for the F-35 jets, rose 5% to $2.99 billion, while operating income increased 17% to $308 million in the first quarter ended March 31.
• Excluding the sale of its IT services business, Northrop earned $6.57 per share in the quarter, up from $5.15 per share a year earlier, topping analysts’ average estimate of $5.48 per share.
• The company raised it 2021 sales outlook to between $35.3 billion and $35.7 billion from $35.1 billion to $35.5 billion.
• Northrop said it now expects full-year adjusted earnings per share between $24 and $24.50, up from its prior range of $23.15 to $23.65, and above analysts’ average estimate of $23.65, according to IBES data from Refinitiv.
• The company order backlog at the end of the quarter was to $79.3 billion.

Caterpillar beats earnings estimates as global recovery boosts sales – Reuters, 4/29/2021

• Caterpillar reported quarterly earnings that exceeded analyst estimates on Thursday, as demand for its machines was propelled by the fastest global economic growth since the 1970s.
• Equipment sales rose 13% year-on-year in the quarter to $11.2 billion, led by a 72% surge in construction machine sales in Asia.
• Adjusted profit for the first quarter came in at $2.87 per share, up from $1.65 per share a year earlier. Analysts surveyed by Refinitiv, on average, expected earnings of $1.94 per share.
• The Illinois-based manufacturer of heavy machinery, however, did not provide an earnings forecast for this year.
• In an interview, Chief Financial Officer Andrew Bonfield said while the company’s expectations for the year were “very positive”, supply chain bottlenecks were making it tougher to keep up with increasing equipment demand.
• Bonfield said the shortages did not impede production in the first quarter, but the supply situation remained “dynamic and very fluid” and could have an impact later this year.

Comcast’s Profit Soars Amid Broadband and Wireless Growth – Wall Street Journal, 4/29/2021

• Comcast posted a 55% rise in first-quarter profit, buoyed by its broadband and wireless-phone units that continued to add more customers.
• Revenue rose 2.2% to $27.21 billion.
• The broadband unit, considered to be the centerpiece of Comcast’s business, added 461,000 new customers.
• Comcast’s cellphone business, which recently introduced new multiline discount plans, had a record quarter with 278,000 new customers. Xfinity Mobile now has more than 3.1 million customers, 37% more than it did a year earlier.
• Meanwhile, customers continue to abandon the company’s pay-TV bundles, which lost 491,000 subscribers during the first quarter.
• Revenue for Comcast Cable, which houses the broadband, pay-TV, mobile and landline phone services, increased 6% to $15.81 billion. NBCUniversal’s advertising revenue fell 3.4% to $2.09 billion.
• NBCUniversal, the Comcast business most affected by the coronavirus pandemic, saw revenue fall 9% to $7.02 billion.
• The company’s Universal Studios theme parks continued to suffer greatly, with revenue dropping 33%.
• Revenue at the film and television studios segment slipped 0.6% to $2.4 billion.
• The media segment, which includes Peacock, broadcast and cable TV, saw revenue increase 3.2% to $5.04 billion.
• Peacock reached 42 million sign-ups, with the company attributing it to the recent addition of the WWE Network.
• The Philadelphia-based company—which operates Xfinity branded services, the NBCUniversal entertainment empire and U.K.-based Sky television business—reported a profit of $3.33 billion, or 71 cents a share, beating FactSet analyst estimates.

Domino’s Pizza profit, U.S. sales beat estimates as more people dine out – Reuters, 4/29/2021

• Domino’s Pizza on Thursday beat Wall Street’s expectations for quarterly profit and U.S. sales as the fast food chain benefited from easing dining restrictions as well as accelerated vaccine rollouts in the country.
• Total revenue rose 12.7% to $983.7 million in the first quarter, below analysts’ estimates of $984.77 million.
• In its international markets, where restrictions are more stringent, people chose to order-in, helping same-store sales of the company grow 11.8% in the first quarter. Analysts were expecting a 6.32% rise, according to IBES data from Refinitiv.
• The company said sales at its U.S. stores open for more than a year rose 13.4% in the quarter ended March 28, exceeding estimates of a 9.54% gain.
• Net income fell to $117.8 million, or $3 per share, from $121.6 million, or $3.07 per share, a year earlier. However, that surpassed expectations of $2.94 per share.

Kraft-Heinz thrives as pandemic spurs home dining – Reuters, 4/29/2021

• Kraft Heinz beat first-quarter revenue and profit estimates on Thursday as a year-long surge in demand for consumables including Lunchables crackers and Kraft Macaroni & Cheese held up even as the U.S. economy gradually reopened.
• Net sales rose to $6.39 billion in the three months ended March 27, surpassing analysts’ average estimate of $6.24 billion, according to IBES Refinitiv.
• Sales in the Jell-O maker’s international markets including the UK, Australia and Latin America, which account for a fifth of its revenue, rose 7.2%.
• Excluding items, Kraft earned 72 cents per share, beating estimate of 59 cents.
• Shares of Kraft, which projects current-quarter organic net sales to rise by a mid-single-digit percentage, rose 2.3% in morning trade.
• The packaged food maker forecast mid-single-digit inflation in 2021 with acceleration beginning in the second quarter. Peer Mondelez (MDLZ.O) on Tuesday warned of price hikes to combat higher raw material costs.

Bristol Myers first-quarter earnings miss expectations as cancer drugs underperform – Reuters, 4/29/2021

• Bristol Myers Squibb reported lower-than-expected first-quarter profit on Thursday as sales of its high margin cancer drugs Revlimid and Opdivo fell short of Wall Street estimates.
• Revenue in the quarter of $11.07 billion was basically in line with analysts’ projections.
• Eliquis sales were $2.89 billion, beating analyst expectations by about $300 million. Revlimid had sales of $2.94 billion, around $150 million lower than Wall Street projections.
• Sales of cancer immunotherapy Opdivo fell 3% to $1.72 billion, also around $150 million shy of analysts’ estimates.
• The company reported net earnings of $2.02 billion, or 89 cents per share, for the quarter, versus a net loss of $775 million a year ago, due in part to costs associated with the Celgene acquisition.
• Bristol Myers still expects full-year earnings in the range of $7.35 to $7.55 a share, Elkins said.

U.S. drugmaker Merck sees bigger hit to full-year sales from pandemic – Reuters, 4/29/2021

• Merck said on Thursday it would take a bigger hit to sales this year than previously expected due to a resurgence in COVID-19 cases that has hurt demand for drugs that need to be given by doctors.
• The pandemic is expected to shave 3% from overall sales, more than the previously projected 2%, after it resulted in a $600 million hit to Merck’s first-quarter sales.
• Sales of Gardasil, a vaccine to prevent cancers caused by the human papillomavirus, tumbled 16.4% to $917 million in the quarter, hurt by lower demand in the United States, Europe and China.
• Sales of Pneumovax to prevent pneumococcal pneumonia and other infections caused by similar bacteria plunged 33%.
• Keytruda sales rose 18.7% to $3.90 billion, but missed analysts’ estimates of $3.98 billion. Sales of Bristol Myers Squibb’s rival drug Opdivo fell 3% in the quarter and also missed analyst estimates. read more
• Excluding items, the company earned $1.40 per share, missing the average analyst estimate by 23 cents, according to IBES data from Refinitiv.

Thermo Fisher profit beats estimates on vaccine-making demand surge – Reuters, 4/29/2021

• Thermo Fisher Scientific beat first-quarter profit estimates on Thursday boosted by revenue at its life sciences unit, which makes raw materials used in COVID-19 vaccines, offsetting slowing demand for tests that detect the coronavirus.
• Thermo Fisher’s quarterly revenue rose 59% to $9.91 billion, above Wall Street estimates of $9.72 billion.
• The world’s largest scientific instruments maker said first-quarter revenue in its life sciences segment rose to $4.20 billion from $1.77 billion a year earlier, a jump of 137%, beating analysts’ average estimate of $4.16 billion.
• Sales at Thermo Fisher’s specialty diagnostics unit, which makes tests for COVID-19, rose 68.6% to $1.62 billion, but missed analyst estimates of $1.83 billion.
• The company said net income rose to $2.34 billion, or $5.88 per share, for the three months to April 3, from $788 million, or $1.97 per share, a year earlier.

Textron raises 2021 profit view on robust demand for helicopters, jets – Reuters, 4/29/2021

• Business jets maker Textron raised its full-year profit forecast on Thursday on improving demand for commercial helicopters and business jets following a rebound in economic growth.
• The company’s revenue rose to $2.88 billion from $2.78 billion.
• The company’s business jet deliveries rose to 28 units in the first quarter ended April 3 from 23 units a year earlier amid increased coronavirus vaccinations and easing travel restrictions. The company had delivered 61 jets in the prior quarter.
• Sales in its aviation division fell to $865 million from $872 million. The unit makes Beechcraft and Cessna aircraft and contributed more than a third to the company’s total revenue in 2020.
• The company’s net income rose to $171 million, or 75 cents per share, in the first quarter, from $50 million, or 22 cents per share, a year earlier.
• Textron expects 2021 adjusted earnings per share of between $2.80 and $3, up from a previous forecast of $2.70 to $2.90.

Royal Caribbean aims to resume U.S. cruises in July after new CDC guidance – Reuters, 4/29/2021

• Royal Caribbean said on Thursday it was aiming to restart its U.S. cruises in July after the U.S. Centers for Disease Control and Prevention (CDC) issued new measures to speed up approvals, sending its shares up 2.5%.
• Royal Caribbean on Thursday reported an adjusted loss of $1.1 billion for the first quarter ended March 31, compared with a loss of $310.4 million a year earlier.
• The company said it burnt cash at the rate of $300 million per month in the quarter and ended the period with liquidity of about $5.8 billion.
• “It could be possible to restart cruising by mid-July… the restart does not mean that we will immediately go into full operation. While we are hopeful about restarting, that restart will be gradual and deliberate,” Royal Caribbean Chief Executive Officer Richard Fain said on a call with analysts.

McDonald’s U.S. Sales Rebound From Covid-19 Pandemic – Wall Street Journal, 4/29/2021

• McDonald’s said new menu items helped it beat sales expectations in the U.S., while business abroad remained volatile because of shifting Covid-19 restrictions.
• McDonald’s reported sales of $5.1 billion for the quarter, up 9% from a year earlier and more than the first quarter of 2019.
• On Thursday, McDonald’s said same-store sales for the quarter ended in March increased 13.6% from a year earlier, beating expectations and bolstering results overall. Global same-stores sales were up 7.5% during the period.
• For its first quarter, McDonald’s reported earnings of $1.92 a share adjusted for one-time items.
• Analysts polled by FactSet expected earnings of $1.81 a share by that metric. The chain reported net income of $1.54 billion.
• The company raised its 2021 global sales outlook.
• Executives said they expect U.S. sales during the current quarter to outpace pre-pandemic levels during the same period of 2019, while they believe international same-store sales will improve but still trail pre-pandemic levels until later in the year.