Top US stocks to watch before the bell: Vaccine makers, Regeneron and Norwegian Cruise
Joshua Warner May 6, 2021 1:17 PM
Biden supports calls for vaccine makers to waive IP rights, Regeneron posts strong growth, Norwegian Cruise Line continues to struggle, ViacomCBS, Tapestry and Aptiv beat expectations, PayPal enjoys a record quarter, and Uber’s outlook disappoints investors.
Pharmaceutical companies producing coronavirus vaccines are expected to come under pressure today and extend the slump that started yesterday after US president Joe Biden backed plans to waive intellectual property rights on vaccines.
European-listed shares in the likes of Pfizer, Moderna and Novavax were trading significantly lower today, extending losses seen yesterday, and are tipped to open lower when US markets open.
Biden said he would support a proposal from the World Trade Organisation to prevent companies from securing IP on their vaccines to ensure the world can fight the virus. While nothing dramatic is expected to happen soon, the move would ultimately dent the future profitability and prospects of making coronavirus vaccines.
Moderna revealed it booked $1.7 billion in sales of its coronavirus vaccine during the first quarter and said it will produce more doses this year than previously expected as demand continues to increase from countries looking to inoculate their populations.
Moderna said it now expects to produce between 800 million and 1 billion doses of its vaccine in 2021 and then up to 3 billion doses in 2022. This should see annual sales of $26 billion this year, up from the $18.4 billion forecast back in February.
Moderna reported net income of $1.22 billion in the first quarter compared to a $124 million loss the year before, when it booked zero revenue.
Regeneron reported strong growth in revenue and profits during the first quarter of 2021 as sales of its eczema drug Dupixent continued to improve while demand for its eye drug Eyelea recovered.
Revenue rose 38% in the quarter to $2.53 billion. Sales of Dupixent, which has been the main driver of growth over the last year, jumped 48% year-on-year while Eyelea sales were up 15%, representing a much improved performance after being hit last year as fewer people went to the doctors to treat other illnesses during the pandemic. Its coronavirus treatment also reported significantly higher sales.
Regeneron reported a net profit of $1.12 billion compared to $625 million the year before.
Norwegian Cruise Line
Norwegian Cruise Line said it booked virtually no revenue during the first quarter of 2021 as cruise ships remained docked and eagerly await the green light to resume operations.
The company said it booked just $3.1 million in revenue during the quarter compared to $1.2 billion the year before. Its net loss of $1.4 billion improved from the $1.9 billion loss the year before. Norwegian Cruise Line warned it will also book a loss in the second quarter.
Norwegian is hoping to start offering cruises in Greece starting in July, for Oceania Cruises to restart sailing in late August and for Regent Seven Seas Cruises to start sailing around the UK in September. US cruises will not start again until July at the earliest, but this date is still highly uncertain. The company has over $1.3 billion in advance bookings and said 2022 bookings are running ahead of pre-pandemic levels.
ViacomCBS said revenue and earnings both grew in the first quarter of the year thanks to an increase in affiliate fees and a rise in advertising thanks to the broadcasting of the Super Bowl.
The company said revenue rose 14% to $7.41 billion in the quarter, coming in slightly ahead of the $7.31 billion expected by analysts. Net earnings jumped to $899 million from $501 million the year before.
Revenue growth was driven by a 5% rise in fees paid by cable and online content distributors and a 21% rise in advertising income. Streaming revenue, coming primarily from its Paramount+ service, jumped 69%.
Tapestry said sales came in marginally ahead of expectations during the first quarter thanks to a rebound in demand for luxury goods and a strong performance online, prompting it to raise expectations for the full year.
The company, which owns Coach, Kate Spade and Stuart Weitzman, said net sales rose 19% year-on-year to $1.27 billion, just ahead of the $1.22 billion forecast by analysts. It turned to a net profit of $92 million from a $677 million loss, partly thanks to significantly better margins.
Tapestry said the strong start to the year has given it the confidence to target revenue growth in the mid-teens percentage in 2021 and said operating income and diluted earnings per share will both improve compared to 2019.
Aptiv reported strong revenue growth and better than expected earnings in the first quarter of 2021 as it reaffirmed its guidance for the full year despite the threat posed by the global shortage in semiconductor chips.
The company, which supplies the likes of keyless entry systems and cabling to carmakers like Ford and Volkswagen, said net sales rose 25% in the quarter to $4.02 billion, ahead of the $3.62 billion expected by analysts as people continue to prefer solo transport by car during the pandemic. Adjusted earnings of $1.06 per share was well ahead of the $0.78 expected by analysts.
Aptiv reiterated its full year guidance despite the shortage in chips causing car factories to close down. It is aiming for annual net sales of $15.12 billion to $15.72 billion.
Linde said it expects to deliver faster growth in earnings this year than previously thought after beating expectations in the first quarter.
The industrial gases company said it is now aiming for adjusted earnings per share to grow by 17% to 19% this year compared to its previous goal of 11% to 13%. EPS in the first quarter rose 32% to $2.49 and beat the $2.26 expected by analysts. Linde said EPS should grow 32% to 34% year-on-year in the second quarter.
The company, which supplies the likes of oxygen and hydrogen to hospitals and factories, benefited from higher prices and growing demand from the healthcare sector, which resulted in sales jumping 10% across Europe, the Middle East and Africa and 7% growth in Asia.
Tesla is developing a platform to allow customers in China to access the data generated by their cars.
The platform is expected to be launched sometime this year and will see Tesla become the first automaker to let customers access the increasing amount of data being generated by cars as more cameras and sensors are introduced. It follows on from draft rules on how data collected by smart cars were published by the Chinese government.
Uber on Wednesday reported higher revenue and narrower losses in the first quarter of 2021, but warned it would have to pay drivers more to cover a shortage and booked a significant charge after the landmark ruling in the UK designated its workers as employees.
Revenue for the quarter came in at $3.5 billion, up 11% from the previous quarter and well ahead of the $3.27 billion forecast by analysts. However, the final figure was dragged down to $2.9 billion after it booked a $600 million charge to account for the UK ruling. The adjusted Ebitda loss of $359 million and net loss of $108 million were both better than the $452 million and $983 million loss expected by analysts, respectively.
The cost of the changes in the UK are significant considering it accounts for less than 7% of total revenue and has reminded investors of how big a threat a similar change in the US would be. It also said its take-rate would fall as it ramps up incentives to attract more drivers to cover a shortage.
PayPal on Wednesday revealed it had a record-breaking quarter in the first three months of 2021 as it benefited from the shift to online spending during the pandemic.
PayPal said revenue was up 31% to $6.03 billion in the quarter after seeing a 50% jump in the volume of payments it handled and adding 14.5 million new active customers. Earnings per share rose to $1.22 from $0.66 and beat expectations of $1.01.
PayPal said it expects to deliver around $6.25 billion in revenue in the second quarter. Over the full year, it is aiming to deliver 20% growth in revenue and 21% growth in EPS.
Booking Holdings said revenue halved in the first quarter but said it has seen encouraging signs that bookings are recovering in the US.
The company, which owns apps like OpenTable and KAYAK, said revenue fell 50% to $1.1 billion while its net loss narrowed to $55 million from $699 million the year before. Excluding items, the loss per share of $5.26 per share beat the $5.87 loss expected by analysts.
Booking Holdings said there was notable strength in the US market in April but said Asia was more challenging.
ArcelorMittal said the significant improvement in the steel market continued in early 2021, boosting sales and delivering its strongest quarterly profit in more than a decade.
The world’s largest steelmaker said Ebitda of $3.2 billion was up 88% from the fourth quarter and more than three times higher than the year before, beating the $2.9 billion expected by analysts.
MercadoLibre said revenue continued to soar in the first quarter as it benefits from increased online spending but said higher spending caused its losses to widen.
The ecommerce and digital payments player operating in Latin America said revenue more than doubled year-on-year to $1.4 billion as the volume of payments and merchandise value handled through its app surged. It reported a net loss of $34 million, almost 61% wider than the year before.
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