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ON THE RADAR: PHARMA AND OCADO SHINE IN Q1 GALORE (0646 GMT)
So, among this morning’s deluge of Q1 earnings reports, shall we start with the good news?
The pharma sector is showing once again its resilience in the crisis with Novo Nordisk joining U.S. rival Eli Lilly and other large companies in the sector sticking to or even raising full-year forecasts. The Danish company posted a better-than-expected Q1 and kept its full-year outlook.
German dialysis specialist Fresenius Medical Care also beat net income expectations and said its strong underlying business offset costs related to the coronavirus pandemic.
Positive news for France’s BioMerieux which announced the launch of a new product that aims to detect within 30 minutes the presence of antibodies in those exposed to the coronavirus.
Another clear winner so far in the crisis is British online supermarket Ocado with retail revenue up a whopping 40.4% year-on-year. Longer term though, Ocado said that it couldn’t offer guidance because of the unknown impact the recession will have on its customers’ income.
In another defensive sector, Telefonica Deutschland also stuck to its guidance as it reported an acceleration in Q1 growth and said business had been largely unaffected by the coronavirus pandemic.
Trading updates are, as one would expect, much less rosy in the banking sector, the top loser so far in the coronavirus crisis.
Italy’s biggest bank UniCredit posted a worse than expected 2.7 billion euro loss in Q1 after writing down loans in anticipation of the damage caused by the pandemic.
France’s Credit Agricole almost tripled the amount of provisions to protect itself from potential loan default and reported a 16.4% decline in quarterly profit.
In Britain, Virgin Money swung to a first-half loss after setting aside 237 million pounds to handle loans likely to go bad.
Blue chips in other sectors also gave a taste of what’s to come. BMW forecast a full-year automotive EBIT margin of 0% to 3%, versus the 2% to 4% range estimated before and expects “containment measures to seriously dampen demand across all major markets over the entire year 2020”.
ITV, Britain’s biggest free-to-air commercial broadcaster reported advertising revenues fell 42% last month and gave no guidance for the rest of the year.
European futures are currently cautiously trading in the red but below the -0.5% mark.
There’s not much of a trend at the moment with some timid gains overnight in Asia and U.S. futures now in slightly positive territory.
Oil prices are also paring some losses so it might just be that European investors are on their toes after yesterday’s gains and ahead of another heavy day of Q1 earnings.
Latest data isn’t really encouraging with companies listed on the STOXX 600 now expected to report a 44.9% decline in earnings in Q2, down from a 40.4% drop forecast last week.
Virus-hit corporate profits seen sliding further in Europe
***** (Reporting by Thyagaraju Adinarayan, Joice Alves, Julien Ponthus and Stefano Rebaudo)