Amazon profits surge as pandemic shifts consumer behaviour

Liam Roche
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Amazon profits surge as pandemic shifts consumer behaviour

Amazon income more than tripled to $8.1bn

Amazon (NASDAQ:AMZN) has confirmed its sales have exceeded $100bn for the second quarter in succession as it continues to benefit from the pandemic.

With consumers across the world increasingly shopping online, streaming videos and working from home, as their behaviour has shifted during lockdowns, Amazon has reported net sales of $108.5bn for the first quarter of the year, up by 44% from the same period a year before.

Amazon’s income more than tripled to $8.1bn, as its share price rose by 3% to a record above $3,590 in after-hours trading.

“There is little to indicate a slow down in Amazon’s growth,” said Daniel Newman, analyst at Futurum Research. “Its businesses across the board, ecommerce, cloud, advertising, devices, are all seeing growth and I expect this to continue into the next quarter.”

Nearly 50% of Amazon’s operating income of $4.2bn came from its cloud division Amazon Web Services (AWS). AWS’s revenue has grown by 32% year-on-year.

Jeff Bezos, the founder of Amazon, has said that he will be stepping down and instead will take on the roll of executive chair. Andy Jassy, chief executive of AWS, will replace Bezos, while the company gave no update on when the succession will take place.

Amazon is expecting its sales to continue too rise, even as lockdowns come to an end, as the company’s guidance suggests revenue somewhere between $110bn and $116bn for the current quarter.

Amazon will spend $1.5bn on coronavirus related procedures within its logistics, and the company believes its net income will be between $4.5bn and $8bn this quarter.

Prime Video has been used by 175m Prime members over the past year, with “streaming hours” up 70% year-on-year.

J. Stern & Co.’s Christopher Rossbach said of the record haul:

“Amazon has continued its extraordinary growth, with revenues well in excess of $100bn again this quarter, which equates to over $13,000 a second. This is another significant milestone as the company continues to break records, and with over 200m Prime households now, the company is entering a new paradigm.”

Revolting shareholders: Scottish remuneration policy rebellion

Andrew Hore
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Revolting shareholders: Scottish remuneration policy rebellion

Shareholders in STV Group (LON: STVG) have not been totally supportive of the media company’s remuneration policy. A shareholder vote on the policy happens every three years. One-quarter of the votes cast were against the directors’ remuneration policy, which is up from one-fifth three years earlier.
However, the vote against the directors’ remuneration report was 1.92%, down from 16.1% against the resolution at the previous AGM.
Management says that it consulted with the largest shareholders ahead of the latest AGM and the policy was revised. STV currently pays 20% of the chief executive’s sa...

Shell share price rises as company lifts quarterly dividend by 4%

Liam Roche
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Shell share price rises as company lifts quarterly dividend by 4%

Shell Share Price

The Shell share price (LON:RDSA) is up by over 1% on Thursday as the Anglo-Dutch company announced its results for the first quarter of the year. This follows a sharp decline, from early March through to late April, when the company’s stock tumbled from 1,584p per share to 1,355p, a fall of 17%. It is a continuation of what has been a volatile year for the oil giant which has struggled to recover from a dramatic fall at the beginning of the pandemic.

Q1 Results

Shell announced on Thursday that its profits rose during Q1 as the oil giant showed signs of recovery from the pandemic-induced downturn through a resurgence in energy consumption and prices. Profits at the Anglo-Dutch FTSE 100 company increased by 13% to $3.2bn compared to the same period the year before. The oil industry more generally is in the early stages of a recovery following the damage caused by Covid-19, which made energy companies tighten their spending and reduce costs.

As a result, Shell made the decision to increase its quarterly dividend by 4% thanks to its improvement in trading. It is the second increase since the company cut its payout, for the first time since the second world war, by two-thirds at the beginning of last year due to the pandemic.

Oil

The immediate outlook for the Shell oil price is dependent on the price of oil. “Market sentiment was dented on worries that a surging number of COVID-19 cases in some countries, especially in India, will slash fuel demand,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co. This caused the price of oil to fall on Monday as Covid-19 cases surged India, one of the world’s biggest oil importers. However, Brent crude futures is up 2.5% to $68.72 on Thursday, while West Texas intermediate (WTI) crude futures are up by 2.25% to $65.11 a barrel.

The technical committee of the OPEC+ has forecast global oil consumption to rebound by 6m bbl/day this year, according to delegates who attended the panel. US benchmark crude futures are up more than 6% so far this month amid signs of a consumption recovery in some parts of the world. However, if the anticipated global economic recovery doesn’t arrive then it could spell trouble for Shell.

Global shares move upwards on Fed support and Biden stimulus

Liam Roche
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0
Global shares move upwards on Fed support and Biden stimulus

MSCI world equity index rose by 0.2%

Shares across the world made further gains on Thursday following the Federal Reserve saying that it was too soon to consider pulling back emergency support for the economy, while Joe Biden proposed a stimulus package.

The MSCI world equity index, which tracks shares in 49 countries, rose by 0.2%, on the way to its best month since November, Reuters reported.

US Treasury yields advance 1.8 basis points to 1.6486, below Wednesday’s two-week high, as euro zone government bond yields stayed below two-month highs.

Fed Chair Jerome Powell said yesterday that “it is not time yet” to start discussing any policy changes after the US central bank left interest rates and its bond-buying programme unchanged, despite holding a positive outlook over the US’s economic recovery.

The Fed’s position, robust US corporate earnings and the notion that Biden is going big on infrastructure were all supportive for markets, said François Savary, chief investment officer at Swiss wealth manager Prime Partners.

“The Fed confirmed the roadmap for any change in policy, which is a reassuring factor,” he said. “It looks like tapering won’t materialise until 2022 and that has induced weakness for the dollar, is supportive of market liquidity and means less pressure on emerging markets.”

Unilever to buy back €3bn of shares after strong quarter

Liam Roche
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0
Unilever to buy back €3bn of shares after strong quarter

Sales of Hellman’s mayonnaise surged thanks to Super Bowl ad

Unilever (LON:ULVR) said on Thursday that it will buy back €3bn of shares after robust sales, specifically of ice cream and mayonnaise, led the company to report strong growth during Q1.

The owner of brands including Marmite, Hellman’s mayonnaise and Magnum ice cream stated its intention to repurchase stock in May and finalise the programme by the end of the year.

The decision came about as the FTSE 100 company recorded growth in its underlying sales of 5.7% for Q1, easily surpassing expectations of 3.9%.

The company’s strong results came about as Unilever’s foods and refreshment division grew by 9.8%, in part thanks to people being able to socialise outdoors, while the company’s marketing company, including an advert during the Super Bowl, helped propel sales to double-digits.

Growth came largely thanks to the respective recoveries in China and India, although the latter is experiencing a worrying spike in Covid-19 cases.

The plan for the buyback “reflects our strong cash flow delivery and balance sheet position,” said chief financial officer Graeme Pitkethly.

“We have had a good start to the year. We are growing faster than our markets,” Pitkethly said.

A year or two ago, the market was questioning whether Unilever could grow at all, yet now it is beating its sales growth target.

AJ Bell investment director Russ Mould, reflected on the company’s performance:

“Amid expectations of inflation accelerating this year, Unilever’s pricing power strengths will be put to the test,” said Mould.

“It has flagged additional supply chain costs and raw material inflation, which is putting pressure on margins, so the solution would be to pass on those costs to the end customer.”

“Of the 5.7% sales growth in the first quarter, 1% can be attributed to higher selling prices and the rest greater sales volumes, so it is already displaying pricing power, particularly in its food and refreshment products.”

Apple off to a flyer in 2021 as iPhone sales soar

Liam Roche
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0
Apple off to a flyer in 2021 as iPhone sales soar

Apple’s net income doubled to $23.6bn

A dramatic increase in the number of iPhone sales has seen Apple (NASDAQ:AAPL) record its best-ever start to a year as the company enjoys renewed demand for its gadgets.

Apple’s total revenues rose by more than 50% to $89.6bn, surpassing analysts’ expectations. It was a record for Q2 as its smartphones and computers sold at unexpectedly high rates.

The FAANG company’s net income doubled to $23.6bn as strong levels of demand for Apple’s new iPhone 12 model, which was released last autumn, cemented its position. Sales of the iPhone surged by nearly 66% to $47.94bn.

Apple also announced a $90 billion share buyback, a day after Alphabet, parent company of Google, promised to repurchase $50 billion in stock.

CEO of Apple Tim Cook, said that the company swerved the chip shortage in Q2 by using up its supply buffers.

In the fiscal third quarter, the shortage could cost the company $3 billion to $4 billion in revenue, said Chief Financial Officer Luca Maestri.

Tim Cook, chief executive, added: “This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us.”

Apple, based in Cupertino, California, is one of the world’s most valuable companies with a market value of over $2.2 trillion. As well as making iPhones, iPads and Mac computers, it also provides services such as the iCloud storage library and App Store.

Shell increases quarterly dividend by 4% as profits jump

Liam Roche
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0
Shell increases quarterly dividend by 4% as profits jump

Shell profits up by 13% to $3.2bn

Shell announced on Thursday that its profits rose during Q1 as the oil giant recovered from the pandemic-induced downturn through a recovery in energy consumption and prices.

Profits at the Anglo-Dutch FTSE 100 company increased by 13% to $3.2bn compared to the same period the year before.

As a result, Shell made the decision to increase its quarterly dividend by 4% thanks to its improvement in trading. Following the announcement Shell shares are up by 1.37% in mid-morning trading.

The oil industry more generally is in the early stages of a recovery following the damage caused by Covid-19, which made energy companies tighten their spending and reduce costs.

Brent crude oil, the benchmark used across the world for the commodity, had remained above $60 per barrel in recent weeks as major producers have put in place supply cuts as demand returns to normal levels.

Royal Dutch Shell confirmed earlier this month that the impact of the Texas winter storm saw the company lose out on $200m in the first quarter of 2021.

Chief executive Ben van Beurden said: “Shell has made a strong start to 2021, generating over $8bn of cash in the quarter. Our integrated business model is ideally positioned to benefit from recovering demand. 

“Our competitive and robust financial performance provides the platform to achieve the goals of our Powering Progress strategy.”

He also said that Shell had reduced net debt by more than $4bn in the quarter, progressing towards the $65bn milestone it needs to hit before increasing shareholder distributions.

FTSE 100 mounts assault on 7,000 on busy day for UK corporate news

Liam Roche
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0
FTSE 100 mounts assault on 7,000 on busy day for UK corporate news

The FTSE 100 is up by 0.7% at mid-morning trading breaking past 7,000 on a busy day for corporate news in the UK.

“Oil major Shell eked out modest gains suggesting investors had already largely priced its return to profit off the back of higher oil prices,” says AJ Bell investment director Russ Mould.

“Continuing strong numbers out of the US technology sector, together with the US Federal Reserve’s latest attempts to allay fears of any imminent rate rise, laid the foundations for the FTSE 100 to mount its latest assault on the 7,000 level,” Mould added.

FTSE 100 Top Movers

Smith and Nephew (5.02%), Standard Chartered (4.37%) and Unilever (3.27%) are the top risers on the FTSE 100 so far this morning.

While Natwest (-3.73%), RELX (-2.05%) and Evraz (-1.13%) have made the biggest losses on the UK index.

Natwest

Natwest has confirmed a dramatic increase in its profits as it joined other banks in getting back money initially allocated to covering bad loans. The part state-owned bank said its profits before tax rose by 82% to £946m for Q1 as £102m of funds were released. 

The FTSE 100 bank also said that support given out by the government was ensuring that businesses are not defaulting on their loans.

Shell

Shell announced on Thursday that its profits rose during Q1 as the oil giant recovered from the pandemic-induced downturn through a recovery in energy consumption and prices.

Profits at the Anglo-Dutch FTSE 100 company increased by 13% to $3.2bn compared to the same period the year before. As a result, Shell made the decision to increase its quarterly dividend by 4% thanks to its improvement in trading. Following the announcement Shell shares are up by 1.37% in mid-morning trading.



Paddy Power owner cashes in amid online gambling boom

Liam Roche
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0
Paddy Power owner cashes in amid online gambling boom

Flutter Entertainment said its betting revenues grew by 43%

Revenues at Flutter Entertainment (LON:FLTR), owner of Paddy Power, have grown by 32% to £1.485m in the first three months of 2021, the company revealed on Thursday.

The Dublin-based FTSE 100 company form said that its sports betting revenues grew by 43% to £896m, while gaming increased by 18% to £589m.

The £1.485bn total was 33% more than the £1.126bn in revenues that the gambling giant reported for the first quarter of 2020.

Flutter estimated its brands accounted for 56% of all Cheltenham customers, with Paddy Power the number one downloaded app during the week.

Peter Jackson, chief executive of Flutter Entertainment, which owns aa number of betting and gaming brands, said the business made a positive start to the year:

“2021 is off to a strong start for the Group. We continued to significantly grow our global player base which in turn drove a 42% increase in our online revenue. At the same time, safer gambling continues to be a key priority across our markets with new measures introduced including our Gamban partnership in the US and development of the planned Affordability Triple Step in the UK,” Jackson said.

“Our UK & Ireland brands continued the strong momentum from 2020, taking further market share with customer acquisition up 59% during the Cheltenham Festival. In Australia we have been highly focused on retaining retail customers that migrated to our platform during 2020 and while it is still early days, we have been pleased with the retention rates to date. In our International division, the investment we are making to enhance player generosity and reinvigorate the PokerStars brand has seen an encouraging early response from customers.”

“In the US, we continue to lead the market with revenue of almost $400m in the quarter. We believe that the quality and breadth of our offering remains a key differentiator for FanDuel sports and the key driver of our leadership position. Our US business had over 1.6m average monthly players in Q1, meaning that it is now twice the size of our Australian business and is quickly closing in on our International division. We are continuing to consider our options with respect to a possible US listing of a small shareholding of FanDuel Group. No decision has been made at this time and we will update the market as appropriate.”

Natwest sees profits surge by 82% as it recovers money set aside for bad loans

Liam Roche
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0
Natwest sees profits surge by 82% as it recovers money set aside for bad loans

Natwest CEO in optimistic mood as UK makes recovery

Natwest (LON:NWG) has confirmed a dramatic increase in its profits as it joined other banks in getting back money initially allocated to covering bad loans.

The part state-owned bank said its profits before tax rose by 82% to £946m for Q1 as £102m of funds were released.

The bank also said that support given out by the government was ensuring that businesses are not defaulting on their loans.

Chief executive Alison Rose said there were “reasons for optimism” as the UK’s vaccine rollout moves along and restrictions are eased while its loan book had performed better than expected in the period.

“However, there is continuing uncertainty for our economy and for many of our customers as a result of COVID-19,” she added.

Natwest followed the path of two of its main competitors in HSBC and Lloyds who both earned back billions set aside in case loans went bad due to the pandemic.

Natwest’s profit came a year after it fell to a £351m loss for 2020 when is set aside £3.2bn was an insurance against loans going bad.

Natwest releasing £102m amounts to a small part of this figure, mainly reflecting the bank’s commercial lending, as “support schemes continue to mitigate realised levels of default”.

The bank – formerly known as the Royal Bank of Scotland – profited from a surge in mortgage lending as there was an upturn in the housing market, with loans for new homes amounting to £9.6bn over the last quarter, up by over £8.4bn from the three month period that came before.

Retail bank customer deposits rose by 4.2% to £179.1bn since the end of 2020 as spending slumped and savings increased in lockdown.

Last month the UK Treasury announced it has finalised the sale of £1.1bn worth of shares back to Natwest. The Treasury’s stake in the British bank is now down to 59.8% from 61.7% following the third sale of its holding.

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