BP reports better-than-expected profits, Halma agrees to acquire PeriGen

London open

The FTSE 100 is expected to open flat on Tuesday, having closed up 0.35% on Monday at 6,983.12.

Stocks to watch

British energy company BP on Tuesday reported better-than-expected first quarter profits on the back of higher oil prices as it hit its debt reduction target early and said it would resume share buybacks in the second quarter. BP’s first-quarter underlying replacement cost profit, the company’s measure of net profit, came in at $2.6bn compared with a $115m in the final quarter of 2020 and $791m a year earlier. Analysts had expected a first-quarter profit of $1.4bn. Net debt was cut by $5.6bn to reach $33.3bn at the end of the quarter, below BP’s $35m target and a year ahead of schedule.

Halma has acquired North Carolina-based PeriGen, it announced on Tuesday, which provides artificial intelligence software with an automated early warning platform during labour. The FTSE 100 company said cash consideration for PeriGen was $58m (£42m) on a cash and debt free basis, which would be funded from Halma's existing facilities. It said PeriGen's unaudited revenue for the year ended 31 March was about $20m, with return on sales slightly above Halma's target range of between 18% and 22%.

HSBC saw first quarter profits more than doubled versus the year ago period, boosted by a reversal in its credit losses, profits across all major divisions, and with its European and US operations back in the black. For the three months to 31 March, the lender posted adjusted pre-tax profits of $6.4bn. That compared positively to the $4.3bn anticipated by the analyst consensus.

Newspaper round-up

Two former senior executives at Serco have been cleared of hiding millions in profits from electronic tagging contracts with the government after their trial collapsed following three weeks of evidence. The prosecution’s move yesterday to ditch charges against Nicholas Woods and Simon Marshall is the latest blow to the Serious Fraud Office, after eight years investigating the allegations. - The Times

Tesla announced a record quarterly profit on Monday as sales of its electric vehicles boomed in the first three months of the year. The world’s most valuable car company recorded a profit of $438m on revenues of $10.39bn despite facing supply issues and the latest in a series of safety investigations following a fatal crash in Texas. - Guardian

For the many City bosses who viewed Brexit as a mistake, the past few months will have cemented their argument that Britain’s financial services industry was going to be left in the lurch. Financial services exports are worth £56bn, according to industry body TheCityUK, yet the sector was largely excluded from the Brexit trade deal and has been stripped of its vital EU passporting rights. Banks have moved around £1.3 trillion worth of UK assets into the EU as a result of Brexit and almost €6bn of EU share trading shifted from London to the continent in the first trading day of this year. - Telegraph

The auditor of a peer-to-peer lender that has raised £121 million from investors resigned after uncovering a catalogue of issues including poor governance, weak record-keeping and accounting errors. EY stepped down as the auditor of Kuflink after it highlighted what it called “significant” deficiencies in internal controls at the business, a sponsor of Southampton FC. Kuflink, which is regulated by the Financial Conduct Authority, links retail and corporate investors with property developers seeking loans via an online platform. - The Times

Wealthy holidaymakers buying premium seats will cushion airlines from the decline in business flying, according to the boss of British Airways. The company’s chief executive, Sean Doyle, said that contrary to research suggesting the airline industry will lose much of its most lucrative clientele, he believed corporate travel would return after the coronavirus pandemic, “but exactly what shape that takes we’re not sure”. - Guardian

US close

Wall Street stocks put in a mixed performance on Monday as one of the busiest weeks on the first-quarter earnings calendar got underway.

At the close, the Dow Jones Industrial Average was down 0.18% at 33,981.57, while the S&P 500 was 0.18% firmer at 4,187.62 and the Nasdaq Composite saw out the session 0.87% stronger at 14,138.78.

The Dow closed 61.92 points lower on Monday, cutting into gains recorded on Friday as major indices recovered from worries about President Joe Biden hiking the capital gains tax on the nation's richest citizens.

Corporate earnings were again firmly in focus on Monday, with Tesla reporting a 74% surge in quarterly revenues and a record quarterly net income of $438.0m.

Many of the US' largest tech companies will report results throughout the course of the week, including Apple, Microsoft, Amazon and Google parent company Alphabet, while Boeing, Ford and Caterpillar will also post earnings before the week is out.