Top US stocks to watch before the bell: General Electric, Tesla and UPS

Demand for GE’s aircraft engines remains depressed, Tesla, UPS and 3M all beat expectations while Eli Lilly and Hasbro disappoint, Toyota prepares to buy Lyft’s self-driving business, and Alphabet and Microsoft will both release results after the markets close.

USA (1)

General Electric

General Electric said revenue and profits dropped during the first quarter of 2021 as demand for its aircraft engines remains depressed during the pandemic.

The company said revenue fell 12% to $17.12 billion and that industrial profit dropped to $828 million from $1.03 billion the year before. Excluding exceptional items, the company reported EPS of 3 cents compared to 2 cents the year before.

General Electric reaffirmed its guidance for the full year for industrial revenues to grow organically by low-single digits and for adjusted EPS of 15 cents to 25 cents.

Tesla

Tesla released first quarter results on Monday, revealing it beat expectations after selling more environmental credits and some of its bitcoin holdings.

Revenue rose to $10.39 billion from just $5.99 billion the year before, marginally beating the $10.29 billion forecast by analysts. Adjusted profit of 93 cents also beat the 79 cents expected. It represents the seventh consecutive quarter of profit for the electric carmaker.

Although Tesla reported record deliveries in the quarter, its results were boosted by a $101 million profit from selling some of its bitcoin and a 48% rise in credit sales to $518 million. Bottom line net profit was knocked by a $299 million award to chief executive Elon Musk after he achieved his targets.

UPS

United Parcel Service continued to benefit from the surge in online shopping during the pandemic in the first quarter of 2021, allowing it to beat expectations.

The world’s largest delivery company said revenue from its US unit rose over 22% in the period, driven by demand from small and medium-sized businesses adapting to the coronavirus crisis. Overall revenue jumped 27% to $22.9 billion and beat the $20.49 billion expected by analysts.

Adjusted EPS excluding items came in at $2.77 and more than doubled year-on-year. UPS did not provide earnings guidance for the full year due to the uncertainty over its outlook.

3M

3M beat expectations in the first quarter as demand for its range of products from its N95 face masks to industrial adhesives continued to grow.

The company said net sales were up 9.6% to $8.85 billion and that net income attributable to shareholders rose to $2.77 per share from $2.25. That was better than the $8.47 billion in revenue and earnings of $2.29 expected by analysts.

Demand for its masks, cleaning equipment and home improvement products have risen during the pandemic. Its industrial unit selling the likes of personal safety products, industrial adhesives and roofing granules reported a 13.7% jump in sales during the period.

Eli Lilly

Pharmaceutical giant Eli Lilly missed expectations during the first quarter as demand for its coronavirus drugs fell after the US government stopped using the company’s coronavirus antibody drug named bamlanivimab.

Distribution of the drug was stopped earlier this year over concerns it could be ineffective against new variants of the coronavirus, but Eli Lilly is hoping it can be revived by being used in combination with other drugs. Still, sales of coronavirus drugs missed expectations in the quarter and Eli Lilly said it now expects annual sales of the drugs to be between $1.0 billion and $1.5 billion rather than its previous goal of $2 billion.

Quarterly net earnings excluding items of $1.87 missed expectations for $2.13. Eli Lilly said adjusted full-year earnings would be between $7.80 and $8.00 after tightening its previous range of $7.75 to $8.40.

Archer-Daniels-Midland

Archer-Daniels-Midland said it is seeing ‘clear, favourable demand trends’ for its agricultural products and that this will continue as the global economy reopens, which should allow significant year-on-year growth in profits across all its divisions.

ADM said revenue was up over 26% in the first quarter to $18.89 billion, well ahead of the $16.38 billion forecast by analysts. Net earnings attributable to shareholders jumped to $1.22 per share from just 69 cents.

Exports of US feed grains, oilseeds and vegetable oils rose in the period as demand from some countries started to recover as their economies reopen, driving demand for its agricultural services and oilseeds unit.

Toyota and Lyft

Toyota Motor Corp will buy Lyft’s self-driving technology unit for $550 million as the Japanese carmaker pursues its ambitions to lead in the automated car space while the US ride-hailing firm tries to become profitable sooner.

Toyota will buy Level 5 Automation and its 300 employees to boost its Woven Planet division launched in January to help spearhead its self-driving technology. For Lyft, it generates some cash and rids it of a business that has huge potential but is currently burning through cash.

Toyota will pay $200 million upfront and another $350 million over the next five years.

Hasbro

Hasbro reported mild revenue growth in the first quarter but missed expectations as its TV and entertainment division dragged down results during the pandemic.

The company said net revenue edged up 1% in the quarter to $1.11 billion, below the $1.17 billion forecast by analysts. Net earnings attributable to shareholders of 84 cents compared favourably to the 51-cent loss booked a year earlier.

Although demand for toys has held up well, its focus on TV and entertainment weighed on growth as production struggles to run normally during the pandemic. Hasbro bought the maker of Peppa Pig and The Walking Dead, Entertainment One, back in 2019.

Alphabet and Microsoft

Alphabet and Microsoft will both report quarterly results later today after the markets close.

Analysts are expecting Google’s owner to report revenue of $41.8 billion and EPS of $15.41, while Microsoft is forecast to report revenue of $40.9 billion and EPS of $1.86 in the third quarter of its financial year.

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