Barclays Q1 profits more than double, Smurfit Kappa sees corrugated volumes rise

London open

The FTSE 100 is expected to open 13 points lower on Friday, having closed down 0.03% on Thursday at 6,961.48.

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UK bank Barclays on Friday said first quarter profits had more than doubled, but cautioned that its outlook remained uncertain due to the Coviud-19 pandemic. The company posted a better-than-expected pre-tax profit before tax for the three months to March 31 of ended March 31 of £2.4bn, up from £923m pounds a year ago and compared with forecasts of £1.76bn. Impairment charges came in at £55m, driven by reduced unsecured lending balances, “no material single name wholesale loan charges and limited portfolio deterioration”. Unlike sector peers Lloyds and NatWest, Barclays did not release any cash set aside to cover potential bad loans from the pandemic.

Smurfit Kappa said corrugated volumes grew around 7% in its first quarter on Friday, in both Europe and the Americas. The FTSE 100 packaging giant said containerboard prices had increased in the first quarter and again at the start of the second quarter, as a result of strong demand and higher recovered fibre and other costs, with the company saying its was “progressively recovering” those costs through its corrugated box system. In addition to cost pressures, Smurfit said the industry was also experiencing supply disruptions and shortages of packaging papers globally.

AstraZeneca said it expected performance to accelerate as the drugs company reported "robust" revenue growth for the first quarter. Revenue increased 15% to $7.3bn in the three months to the end of March, or by 11% excluding currency movements. At constant currency and excluding the Covid-19 vaccine revenue rose 7% to $7.05bn. Core earnings per share rose 55% to $1.63 and the company reiterated its full-year guidance for core EPS between $4.75 and $5. Total revenue included $275m of pandemic Covid-19 vaccine sales.

Newspaper round-up

WPP is withholding hundreds of thousands of pounds in share awards from Sir Martin Sorrell after alleging that its former boss leaked “confidential information” to the media. In its annual report, the advertising group accused Sorrell of disclosing sensitive information about the company and clients in an apparent breach of his employment contract. WPP has exercised “malus” powers to withhold share-based bonuses that he would have received this year and next. - The Times

Britain’s economy is building momentum and the Bank of England is expected to sharply upgrade its annual growth forecasts next week, as a Guardian analysis shows rapid progress rolling out the Covid vaccine is fuelling a boom in consumer spending. Activity has held up better than expected after businesses adapted to life under the third national lockdown, while the reopening of non-essential retail and hospitality venues outdoors in England and Wales has benefited from pent-up demand. - Guardian

NatWest will move its headquarters out of Scotland after 294 years if the country becomes independent, chief executive Alison Rose has said. Ms Rose said the bailed-out bank would be forced to act because it is simply too big for the Scottish economy to support. The lender - which last year changed its name from Royal Bank of Scotland - holds around £770bn of assets, almost five times Scotland's GDP. - Telegraph

Amazon’s profits have more than tripled as homebound consumers continue to shop online, companies spend heavily on digital advertising and its powerhouse cloud computing division keeps growing. The ecommerce group beat expectations on Wall Street for its latest quarter after the pandemic bolstered the dominance of its technology. - The Times

The Co-operative Group is to stop selling plastic “bags for life” because, with many shoppers using them only once, they have become as big a problem as the single-use carriers they replaced. With more than 1.5 billion “bags for life” sold each year Jo Whitfield, the chief executive of Co-op Food, said plastic pollution was a “massive issue” for retailers. “Many shoppers are regularly buying so-called “bags for life” to use just once and it’s leading to a major hike in the amount of plastic being produced,” she explained. - Guardian

US close

Wall Street stocks closed in positive territory on Thursday, with market participants snapping up some profits after some better-than-expected big tech earnings overnight.

At the close, the Dow Jones Industrial Average was up 0.71% at 34,060.36, as the S&P 500 added 0.68% to 4,211.47 and the Nasdaq Composite was ahead 0.22% at 14,082.55.

The Dow opened 239.98 points higher on Thursday, following losses in the previous session that came despite the Federal Reserve announcing the continuation of its current easy policy, holding interest rates near zero, even while acknowledging that the US economy was accelerating.

On the macro front, an advance reading of the US' first-quarter gross domestic product revealed economic activity had boomed at the beginning of 2021, with widespread vaccinations and government spending began to help the US economy claw back to where it was before the Covid-19 pandemic.

According to the Commerce Department, gross domestic product jumped 6.4% on an annualised basis in the first three months of 2021, which, outside of the reopening-fuelled third-quarter surge in 2021, was the best period for GDP since 2003.