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(Alliance News) - Stock prices in London are seen opening lower on Friday following disappointing earnings from US big-tech firms Apple and Amazon overnight.
In early company news, state-backed lender NatWest Group reported a surge in third-quarter earnings. Hilton Food Group made an acquisition, and IT services provider Computacenter expressed confidence in its prospects for 2021.
IG futures indicate the FTSE 100 index is to open 26.37 points lower at 7,223.10. The blue-chip index closed down 3.80 points, or 0.1%, at 7,249.47 on Thursday.
NatWest Group said it delivered a strong operating performance in the third quarter.
For the three months to September 30, total income was up 14% to GBP2.77 billion from GBP2.42 billion last year and operating pretax profit more than tripled to GBP1.07 billion from GBP355 million.
Third-quarter attributable profit rose 10-fold to GBP674 million from GBP61 million.
Looking ahead, NatWest said it expects risk-weighted assets to be below its previously guided range of GBP185 billion to GBP195 billion on January 1, 2022.
"Throughout [the third quarter] NatWest continued to deliver a strong operating performance; growing in key areas and accelerating our digital transformation to improve customer experience and make our business more efficient. Our robust capital position means that we have been able to buy back GBP402 million of our shares to date whilst also investing for growth as we support our customers and drive sustainable returns to our shareholders," said Chief Executive Officer Alison Rose.
Miner Glencore reported lower production of copper, gold and zinc in the third quarter, compared to a year before, down 14%, 30% and 12%, respectively. However, ferrochrome output jumped by 61% annually in the quarter.
"The asset base has largely performed in line with our expectations and our full-year production guidance remains unchanged," said Chief Executive Officer Gary Nagle. "Notably, as energy markets have improved, we are recovering from the market-driven production cuts initiated within our Australian coal portfolio in H2 2020.
For the company's Marketing arm, which trades commodities, Nagle said Glencore expects full-year adjusted earnings before interest and tax to exceed the top end of the company's USD2.2 billion to USD3.2 billion per annum long-term guidance range. Glencore reported adjusted Ebit of USD3.3 billion for the Marketing arm in 2020, up 41% from 2019.
Hilton Food Group said trading for the period from July 19 to date has been in line with expectations, driven predominantly by the rollout of its growth strategy in Australia and Asia Pacific, as well as through continued expansion across a range of protein categories.
In Europe, Hilton Food said it continued to make good progress in a number of markets with overall regional revenue relatively flat for the quarter. It said the performance reflected the increase in the number of consumers eating out following the re-opening of food service.
Still, Hilton remarked that it has seen growth in the slow cooked business in the UK, as well as in Central Europe, with continued volume growth in fresh food across both Tesco and Zabka.
"The group's financial position remains strong, and we continue to explore opportunities to invest in and to grow the business in both domestic and overseas markets," the company said.
Hilton Food also said it has acquired UK meat supplier Fairfax Meadow Europe from Argent Holdings for GBP23.8 million. The purchase was funded from the company's debt facilities. Fairfax was loss-making in 2020, but Hilton Food said the business is recovering strongly.
Computacenter said the third quarter ended September 30 was marginally above expectations, leaving the IT services provider track to deliver record revenue, profits and earnings per share for 2021.
Computacenter also highlighted that product supply shortages were not as severe as some market predictions. However, it acknowledged shortages were affecting the timing of revenue bookings and increasing inventory levels, as it waits for components to complete orders. "Without these constraints our expected record performance would be even stronger," the company said.
"We enter the fourth quarter with strong backlogs in both Services and Technology Sourcing. The Technology Sourcing backlog is at record levels driven by three factors - strong underlying demand, vendor product supply constraints and customers placing advance orders to mitigate the risk of product shortages," the company said.
In Tokyo on Friday, the Nikkei 225 index closed up 0.3%. In China, the Shanghai Composite was up 0.6%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney underperformed, closing down 1.4%.
New York ended higher on Thursday, with the Dow Jones Industrial Average up 0.7%, S&P 500 up 1.0%, and Nasdaq Composite up 1.4%.
After the market close, Amazon reported its profit in the recently ended quarter slipped to USD3.2 billion, as the pandemic, hiring and product shortages drove up costs.
The e-commerce company said its sales climbed to USD110.8 billion, but its profit was about half of its net income from the same quarter last year.
Amazon shares fell 4.0% in after-hours trade in New York.
Apple said a strong fourth quarter "capped off a remarkable fiscal year", but shares slipped after-hours on a revenue miss.
Shares in Apple declined 3.5% after-hours following the results release.
Total revenue for the three months to September 25 jumped 29% year-on-year to USD83.36 billion from USD64.70 billion. Net income strengthened 62% to USD20.55 from USD12.67 billion, and diluted earnings per share grew 70% to USD1.24 from USD0.73.
While the Cupertino, California-headquartered iPhone maker's quarterly EPS figure was spot-on consensus, the sales figure - while a September quarter record - missed the mark, with analysts having pencilled in nearly USD85 billion.
"European markets have spent the last couple of days slipping off their recent highs, more on inertia than anything else, and look set to open slightly lower again this morning after the earnings disappointments from Amazon and Apple sent US futures lower," said CMC Markets analyst Michael Hewson.
Meanwhile, US President Joe Biden announced Thursday a revised USD1.75 trillion social spending plan that he is confident Democrats will support after weeks of wrangling, and which could prop up the economy going forward.
The pound was quoted at USD1.3787 early Friday, down from USD1.3808 at the London equities close Thursday.
The euro was priced at USD1.1670, down from USD1.1682. Against the yen, the dollar was trading at JPY113.52 in London, up from JPY113.29.
Brent oil was quoted at USD84.33 a barrel Friday morning, up from USD83.94 late Thursday. Gold stood at USD1,796.20 an ounce, down from USD1,802.81.
The economic events calendar on Friday has German GDP at 0900 BST and eurozone inflation and GDP at 1000 BST. US core personal consumption expenditures are due at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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