Top US stocks to watch before the bell: J&J, P&G and Lockheed Martin

J&J and P&G both beat expectations, Lockheed Martin raises its guidance, Canadian National bids for Kansas City, IBM’s growth accelerates, Abbott sees profits treble, AutoNation benefits from chip shortage, and several banks line up bids for Citigroup’s consumer banking unit.

USA (1)

Johnson & Johnson

J&J beat expectations during the first quarter of 2021, narrowed its guidance for the full year, raised its dividend and revealed it booked $100 million worth of revenue from its coronavirus vaccine.

Adjusted EPS came in at $2.59 per share, ahead of the $2.34 expected by analysts. J&J said it is now expecting full year adjusted profit of $9.42 to $9.57 per share in 2021 rather than its previous forecast of $9.40 to $9.60. Quarterly sales rose almost 8% year-on-year to $22.32 billion and slightly beat expectations.

J&J raised its quarterly dividend to $1.06 per share from $1.01.

Proctor & Gamble

P&G reported strong growth during the first three months of the year thanks to sustained demand for its hygiene and cleaning products during the pandemic.

Net sales rose 5% year-on-year to $18.1 billion and came in ahead of the $17.9 billion expected by analysts. Net income per share inched up to $1.26 from $1.12.

Demand for goods like Charmin toilet paper and Tide laundry detergent has driven growth, although P&G warned it was starting to raise the price of some goods like baby care and feminine products to counter rising commodity prices.

Lockheed Martin

Lockheed Martin reported better than expected profits during the first quarter of 2021, prompting it to raise its guidance for the full year.

Quarterly net earnings rose to $1.8 billion from $1.7 billion the year before and the per share figure of $6.56 beat expectations of $6.31. Net sales increased 3.9% to $16.26 billion thanks to demand for ships and helicopters but still came in slightly lower than expected.

Lockheed Martin said it is now expecting to deliver annual earnings per share of $26.40 to $26.70 per share, ahead of the $26.31 currently pencilled in by analysts.

Canadian National and Kansas City

Canadian National Railway has offered to buy railroad operator Kansas City Southern for $33.7 billion, trumping a rival bid made by Canadian Pacific last month.

Canadian National Railway is offering $325 per share for Kansas City, a considerable 27% premium to the closing share price yesterday. That is made up of $200 in cash and 1.059 shares in Canadian National Railway for each Kansas City share.

Canadian Pacific agreed to buy Kansas City last month in a $25 billion cash-and-stock deal as it seeks to create the first railway network that spans the US, Mexico and Canada.

IBM

IBM on Monday reported its fastest quarterly growth in almost two years during the first three months of 2021 thanks to its cloud-computing business, allowing it to beat analyst expectations.

Total revenue edged up by 1% to $17.73 billion, slightly ahead of the $17.35 billion forecast by analysts. Net income fell to $955 million from $1.18 billion but the adjusted EPS of $1.77 was better than the $1.63 expected.

Topline growth was driven by its cloud-computing business, which saw sales rise 21% in the quarter to $6.5 billion.

Abbott Laboratories

Abbott Laboratories said profits more than trebled during the first quarter of the year thanks to continued demand for its coronavirus tests and continued growth from its diabetes and nutrition businesses.

Quarterly net earnings jumped to $1.8 billion from $564 million the year before, or to $1 per share from just 31 cents. Net sales jumped to $10.5 billion from $7.73 billion.

AutoNation

AutoNation said profits almost trebled during the first three months of the year thanks to higher margins on vehicle sales as a global supply shortage of chips pushes up prices.

The company said quarterly adjusted net income jumped to $233.8 million from just $82.4 million the year before, with the per share figure rising to $2.79 from 91 cents. That was on the back of a 26.5% rise in revenue to $5.90 billion.

AutoNation said demand continues to outstrip supply as people prefer to travel alone than use public transport and other alternatives during the pandemic, while supply is being constrained by the shortage of chips.

Citigroup

A string of major banks are reported to be considering tabling bids for part of Citigroup’s consumer banking operations in Asia after the bank announced plans to withdraw from 13 markets earlier this month.

DBS Group, Mitsubishi UFJ Financial Group, OCBC and Standard Chartered are among those thought to be preparing to make a bid in the coming weeks. Ten of the markets Citigroup is exiting are in Asia, a growing area of interest for many banks seeking to tap-into faster rates of growth.

Travelers

Travelers has installed confidence among the insurance sector after the company beat expectations in the first quarter of 2021.

The insurance giant said net written premiums rose 2% in the quarter to $7.51 billion and that core income rose 3% to $2.73 per share, beating the $2.37 expected by analysts. Total revenue was up 5% to $8.31 billion.

The result came as returns from its investments helped offset the rise in claims during the pandemic.

Apple

Apple is expected to launch a new podcast subscription service alongside new iPads and Mac computers at its virtual event later today.

A new tracking device named AirTags could also be unveiled that is based on the same tech that helps people find lost items like their phone or keys. News of a podcast service would support Apple’s move toward more service-based revenue and heighten competition against the likes of Spotify.

PayPal

Venmo, PayPal’s peer-to-peer payment service, has started allowing users to buy, store and sell cryptocurrencies on its app as of today.

Venmo’s 70 million users will be able to buy the likes of bitcoin, Ethereum and Litecoin. It follows on from PayPal’s decision to starting embracing cryptocurrencies last year and upon discovering that around 30% of Venmo’s users have bought some form of cryptocurrency – most of them since the pandemic erupted.

AfterPay

Australian buy-now, pay-later firm AfterPay is considering listing in the US after North America became its biggest market.

AfterPay was last valued at around $28.7 billion as demand soared during the pandemic, although the company is yet to post a profit. Sales in North America nearly trebled during the latest quarter to make it a bigger market than Australia.

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