Top US stocks to watch before the bell: Disney, AirBnB and Coinbase

Disney’s streaming growth disappoints, AirBnB sees strong growth in bookings as vaccines are rolled-out, Coinbase reports a surge in cryptocurrency trading activity, DoorDash sees revenue treble, General Mills buys Tyson’s pet food business, and Aurora plans to move to the Nasdaq from the NYSE.

USA (1)

Disney

Disney on Thursday posted significantly better profits in the second quarter of its financial year, but this was overlooked by slower growth for its streaming services.

Revenue dropped to $15.61 billion in the quarter to April 3 from $18.02 billion the year before, missing the $15.87 billion expected by analysts. However, adjusted EPS of $0.79 rose from $0.60 and was well ahead of the $0.28 forecast by Wall Street.

Disney said things were improving as theme parks and resorts reopen while productions resume. Disney+ had 103.6 million subscribers in early April, but this missed the 109.3 million expected by analysts, while average monthly revenue also fell much more than expected.

AirBnB

AirBnB on Thursday reported significant growth in bookings during the first quarter as the company beat Wall Street’s expectations.

Gross bookings were up 52% in the quarter to $10.29 billion, breezing past the $6.93 billion expected by analysts. With travel still limited, revenue was up 5.4% to $886.9 million but that was still better than the $714.4 million expected. Its adjusted loss before interest, tax, depreciation and amortisation narrowed to $59 million from $334 million.

AirBnB said the progress with vaccines had helped the business and that ‘people are ready to travel’. It noted a surge in bookings when the UK said it would exit lockdown back in February and saw a similar trend in France when it followed in May. It also saw increased bookings among older Americans since they were the first to be jabbed.

Coinbase

Coinbase on Thursday released its first trading update since its blockbuster IPO earlier this year, revealing a sharp increase in the number of people trading cryptocurrencies led to a jump in revenue and profits.

It ended March with 56 million verified users compared to 43 million at the end of 2020, and monthly transacting users jumped to 6.1 million from 2.8 million. Trading volumes jumped to $335 billion compared to just $89 billion in the previous quarter, with the amount of assets on the platform rising to $223 billion from only $90 billion three months earlier.

Net revenue jumped to $1.80 billion with net income of $771 million. That compared to just $497 million in revenue and profit of $177 million in the fourth quarter of 2020, and well ahead of the previous year.

DoorDash

Food delivery and takeout company DoorDash said it handled a record number of orders in the first quarter of 2021 as revenue almost trebled year-on-year.

The company said total orders in the quarter were up 219% to 329 million, leading to revenue jumping 198% to $1.1 billion. Its net loss narrowed to $110 million from $129 million. Revenue came in higher than the $993.3 million expected by analysts and the net loss was much better than the $312 million forecast.

General Mills and Tyson Foods

General Mills is buying Tyson Foods’ pet treats business for $1.2 billion in cash.

The cereal maker already owns the likes of Blue Buffalo pet foods and will add brands including Nudges, Top Chews and True Chews to its portfolio. General Mills said pet food sales grew 13% in the nine months to February 28, while Tyson’s pet food business reported $240 million in net sales over the year to April 3.

General Mills expects the deal to boost earnings modestly in the first year, and Tyson Foods will continue to supply the meat ingredients to the business even after it is sold.

Aurora Cannabis

Aurora Cannabis said it will be moving its US listing to the Nasdaq from the NYSE because of its ‘cost-effectiveness’ after its rivals completed similar moves last year, as it reported lower revenue in the third quarter of its financial year as the pandemic weighs on demand.

The company’s US shares will start listing on the Nasdaq on May 25 and will ‘enable us to realise cost efficiencies as part of our efforts to deliver long-term value to shareholders’, it said.

Aurora said cannabis revenue dropped 19.5% in the latest quarter to CAD58.4 million, which was also 17% lower than the previous quarter. It reported an adjusted loss of $24 million compared to a $49.6 million loss the year before, caused by tighter margins and higher spending on R&D and general purposes.

Amazon

Amazon is set to create 10,000 new permanent jobs in the UK before the end of 2021.

The company said it intends to hire people to work in its corporate offices, for its cloud-computing business Amazon Web Services and its operations network. The recruitment drive is significant considering Amazon has around 45,000 workers in the UK at present.

It follows on from a statement yesterday that said it would hire 75,000 employees across the US and Canada.

Facebook

Ireland’s High Court will later today decide whether the country’s data regulator should press ahead with a provisional order to stop Facebook transferring user data out of the EU and to the US.

The initial order was issued last August after Europe’s highest court ruled Facebook’s decision to move data on EU users to the US was against rules. Facebook has warned it could have ‘devastating’ and ‘irreversible’ consequences for its business.

Ireland’s High Court, which is the EU’s lead regulator for Facebook, temporarily suspended the order while it reviewed the decision.

Graphic Packaging

Graphic Packaging is to acquire European outfit AR Packaging for around $1.45 billion from CVC Capital Partners Fund.

AR Packaging is the second largest producer of fibre-based consumer packaging in Europe and will add around $1.1 billion in annual sales and boost earnings immediately for Graphic Packaging. The deal should close in four to six months.

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