UK stocks moved higher heading into the weekend thanks to more positive company results both in the UK and the US.
Overnight, online retail giant Amazon.com posted a fourth consecutive quarter of record earnings, helped by Prime subscriptions, advertising income and the strength of its web services business, sending its shares up 4% in after-market trading.
In contrast, shares in Twitter fell 11% after-market as investors were left disappointed by the firm’s advertising income and its tepid short-term revenue forecast.
On the currency markets, sterling drifted lower against the dollar to $1.3940, while gold and oil also ticked lower to $1,771 per ounce and $68.17 per barrel respectively.
At 8.30am the FTSE 100 benchmark was up 25 points or 0.4% to 6,984 points led by healthcare and utility stocks, while financials were in the losing column.
Pharmaceutical giant AstraZeneca (AZN) was the best performer on the FTSE, adding 2.8% to £76.08 after the firm reported ‘robust’ revenue growth of 15% in the first quarter driven by oncology drugs as well as its Covid vaccine.
The firm flagged its strong drug pipeline, with significant advances for its Lynparza breast cancer treatment in recent trials, and confirmed its expectation of ‘a performance acceleration’ across the group in the second half.
Shares in FTSE rival Hikma Pharma (HIK) added 2.2% to £24.17 after the company posted a first quarter trading update saying 2021 was ‘off to a good start’ with performance in line with its expectations.
The company confirmed its forecast for injectables sales to grow by mid single digits this year and for operating margins in the 37% to 38% range, but raised its forecast for generics revenues to the top end of its previous guidance (ie $810 million) with an operating margin in the region of 20%.
Barclays (BARC), the last of the big four UK lenders to report, posted first quarter pre-tax profits of £2.4 billion, more than double last year’s £923 million and comfortably ahead of the consensus forecast of £1.76 billion.
The better results were largely due to the performance of the investment banking unit which capitalised on the boom in share trading and listings while avoiding any involvement in the Archegos or Greensill scandals.
Unlike most of its peers, the bank didn’t write back any of its £9 billion of provisions for bad loans, instead taking a notional charge of £55 million. This seemed to unnerve investors, who marked the stock down a hefty 5.3% to 178.7p.
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 20.8% to £8.8 million, while the company raised its interim dividend to 1.69p, a hike of 45.7%. Shares climbed 3.5% to 162p.
Music rights group Hipgnosis (SONG) issued another 9 million new shares at 119.5p against a closing price of 122.6p ‘to fund an investment’. While small in the grand scheme of things, the placing takes the total amount of equity capital raised since IPO to close to £750 million. Shares were almost flat at 122.4p.
Cyber security company Darktrace announced it would place its shares at 250p, giving the firm a market value of £1.7 billion or around half the amount mooted earlier this month. Unconditional dealing in the shares begins on 6 May.
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