Top US stocks to watch before the bell: Banks, Pepsi and Thermo Fisher

Bank of America and Citigroup follow their peers by smashing expectations, Pepsi hopes trade sales will improve as the economy reopens, Thermo Fisher buys PPD, plus more on BlackRock, UnitedHealth, Taiwan Semiconductor, Facebook and TuSimple.

USA (1)

Bank of America

Bank of America beat expectations today after revealing that profit more than doubled during the first quarter of 2021, boosted by the release of $2.7 billion worth of reserves that were originally put aside to cover potentially bad loans during the pandemic.

The bank reported net income applicable to shareholders of $7.56 billion compared to just $3.54 billion the year before. On a per share basis it rose to 86 cents from 40 cents, beating expectations for 66 cents.

The bank revealed its consumer banking division contracted during the period and lending also struggled amid low interest rates, but said it hopes lending can rebound as the economy recovers.

Citigroup

Citigroup said net income trebled during the first quarter of the year, smashing expectations, as it announced it is withdrawing from its consumer business in 13 markets.

The bank said net income rose to $3.62 per share from $1.06 the year before, well ahead of the $2.60 forecast by analysts. The performance was driven the release of reserves set aside for bad loans.

Citigroup also said it was exiting its consumer businesses across Asia and the EMEA region, exiting markets like China, India and Australia. 

BlackRock

BlackRock’s first-quarter profit beat expectations today as the world’s largest asset manager benefited from strong capital markets attracting more money into its funds.

Net income rose to $7.77 per share from $6.60 the year before, slightly ahead of analyst expectations of $7.64.

BlackRock said its assets under management rose to a record $9 trillion in the quarter, up from just $6.47 trillion a year earlier.

Pepsi

Soft drinks giant Pepsi said it expects organic revenue growth to accelerate in the second quarter as the economy continues to reopen and more people visit restaurants again.

Although the company has benefited from consumers buying more goods in supermarkets during the pandemic, sales to trade and hospitality have suffered as restaurants and other outlets were closed. Net revenue in the first quarter rose 6.8% to $14.82 billion, beating expectations for $14.55 billion, while net income rose to $1.24 from $0.96.

Thermo Fisher

Thermo Fisher Scientific said it has agreed to buy contract research firm PPD for around $17.4 billion in a deal it hopes will close before the end of the year.

The company is paying $47.50 a share and taking on $3.5 billion worth of debt as part of the deal, which will expand its clinical research service business. It is expected to add around $1.40 to earnings per share in the first 12 months of ownership.

UnitedHealth

UnitedHealth has raised expectations for 2021 after reporting strong growth from its Optum unit.

The health insurer has suffered as more elective surgeries, and therefore claims, start again after many were put on hold last year because hospitals were too busy with the pandemic. However, Optum, which manages drug benefits and provides analytics on the healthcare industry, reported 10% growth in revenue during the latest quarter. Adjusted earnings in the quarter came in at $5.31 per share, beating expectations of $4.38.

UnitedHealth said it now expects to report adjusted earnings of $18.10 to $18.60 per share in 2021, higher than its previous forecast of $17.75 to $18.25.

Taiwan Semiconductor

Taiwan Semiconductor reported strong growth in profit during the first quarter that beat expectations, but warned the global supply shortage of chips is likely to continue until at least next year.

The chipmaker said first-quarter net profit of T$139.7 billion, beating expectations of T$134.01, as revenue jumped over 25%. The company said it expects annual revenue this year to rise about 20% compared to a previous target of mid-teens percentage.

Taiwan Semiconductor said it expects the supply shortage of chips to ease in the coming quarters but warned the disruption could last until next year, echoing comments from Intel that the crisis could take several years to resolve.

Facebook

Facebook has agreed to buy a renewable energy in India in a landmark deal for the social media company.

The company has agreed to buy power from a local wind farm project and will form part of a wider portfolio being built up by Facebook and its partner CleanMax. CleanMax is owning and operating the projects while Facebook is buying the power to help power its operations.

TuSimple

TuSimple has raised $1 billion in its IPO and started life out as a publicly-traded business with a valuation of $8.5 billion.

The self-driving truck startup sold new shares at $40 a piece and will debut on the Nasdaq today. The company is backed by Volkswagen’s commercial truck unit and UPS, with production of its vehicles due to start in 2024.

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