Early Morning Call: Barclays, AstraZeneca, Amazon earnings

Equity markets were mixed overnight in the APAC region, similar to the performance of US indices yesterday. In China, industrial profits fell 21.4% in the first three months of the year, compared to the same period a year ago. It is a slight improvement on the 22.9% decline in the first two months, but still show how the Chinese economy is struggling to recover after exiting its zero-Covid policy.

Over in the US, the market awaits Q1 GDP growth rate at 1.30pm. Preliminary estimates are for a 2% expansion QoQ, after a 2.6% rise in Q4. Also expected: initial jobless claims and March pending home sales.

In the UK, AstraZeneca beat expectations in the first quarter. The drugmaker reported adjusted profit of $1.92 per share on sales of about $10.9 billion. Sainsbury’s posted a 5% fall in full-year profit, and expects a 2023-24 profit higher that analysts’ forecasts. Barclays posted a pretax profit of £2.6Bln, above analysts’ forecast. The lender’s consumer, cards and payments rose 47% to £1.13Bln.

Elsewhere in Europe, Deutsche Bank posted an 11th consecutive quarter of profit, up 9% rise in the first quarter to €1.16Bln. That's better than the €977Mln anticipated by analysts. It reported a 19% drop in investment banking revenue, worse than expectations. But this was offset by better-than-expected revenue at the corporate bank and retail divisions, helped by higher interest rates. STMicroelectronics posted better-than-expected earnings and revenue in the first quarter. Diluted earnings per share came in at $1.10, compared to expectations of 99 cents. Revenue rose nearly 20% to $4.25Bln.

After Alphabet and Microsoft, Meta posted strong results yesterday evening. Shares jumped 12.6% in extended trading. Earnings for the first three months of the year fell to $2.20 per share from $2.72 a year earlier but beat expectations of $2.03 a share. Revenue increased by 3% to $28.65Bln billion, better than the $27.66Bln anticipated by the market. In the conference call following the release, Mark Zuckerberg pointed out the significant progress the group has made in building out its AI infrastructure. AI helped to boost traffic to Facebook and Instagram and energised ad sales. Meta narrowed its annual expenses forecast to between $86 billion and $90 billion, down from the $86 billion to $92 billion it had predicted in March. As for the current quarter, Meta expects revenue between $29.5Bln and $32Bln, compared with analysts' estimates of $29.53Bln, according to Refinitiv data.

Another tech giant is due to report quarterly figures tonight after the US closing bell: Amazon. The group is expected to post earnings of 21 cents per share on revenue of $124.55Bln. Investors will be particularly attentive to the performance of Amazon Web Services. AWS is the leader in cloud computing business, ahead of Microsoft's Azure and Alphabet's Google Cloud. These last two have performed well in the last quarter helping to lift Microsoft and Alphabet shares.