LONDON MARKET PRE-OPEN: RBS Profit Slips; AstraZeneca Starts 2019 Well

LONDON (Alliance News) - Stock prices in London are set for a slightly higher open on Friday, as Royal Bank of Scotland warned Brexit could affect future growth amid a busy morning for first quarterly earnings. IG futures indicate the FTSE 100 index is to open 5.2 points higher at 7,439.33. The blue chip index closed down 37.62 points, or 0.5% at 7,434.13 on Thursday. In UK corporate news, RBS reported a decreased profit in the first quarter on lower income and warned Brexit could continue to harm the lender's income growth.The government majority owned bank's operating pretax profit in the three months ended March decreased 17% to GBP1.01 billion from GBP1.21 billion the year before. RBS's profit attributable to shareholders slipped 13% to GBP707 million.RBS attributed the decreased quarterly profit to lower income.RBS's first quarter total income fell 7.9% to GBP3.04 billion from GBP3.30 billion year-on-year, with net-interest income declining 5.6% to GBP2.03 billion from GBP2.15 billion.The lender's cost-to-income ratio edged up to 63.4% in the quarter compared to 60.5% the year prior. RBS' CET1 ratio at the end of March was 16.2%, down from 16.4% at the end of the first quarter a year ago. At the end of 2018, RBS's CET1 ratio stood at 16.2%. The bank's net interest margin in the first quarter was 1.89% versus 2.04% in the first quarter of 2018. In the fourth quarter of 2018, RBS's NIM was 1.95%.AstraZeneca reported a strong set of first quarter results, with new medicines helping drive growth in product sales.AstraZeneca's product sales climbed 10% for the first three months of 2019 to USD5.47 billion, with constant currency growth 14%. Revenue was up 6%, or 11% constant currency, to USD5.49 billion.Pretax profit doubled to USD758 million, with reported operating profit rising 58% at actual currency rates to USD1.10 billion and core operating profit up 84% at actual rates to USD1.65 billion.Looking within products, Oncology sales rose 54% to USD1.89 billion, New Cardiovascular, Renal, & Metabolism sales rose 15% to USD1.03 billion, and Respiratory sales climbed 9% to USD1.28 billion.pressure.Emerging markets as a segment posted 14% growth to USD2.00 billion, with Chinese sales up 21%.Looking ahead, AstraZeneca has reiterated all 2019 guidance, including for high single-digit growth in product sales. Advertising giant WPP said it is making good progress, with first quarter revenue up 0.9% at reported currency to GBP3.59 billion. Excluding currency movements, revenue was down 0.6%, and like-for-like it fell 1.3%. Like-for-like revenue minus pass-through costs in North America fell 8.5%, making it WPP's weakest performing region, due to continued losses among automotive, pharmaceutical, and fast-moving consumer goods clients.UK like-for-like revenue less pass-through costs fell 0.9%, slightly worse than the year ago period, while the figure fell 0.3% in Western Continental Europe.WPP's like-for-like revenue less pass-through costs elsewhere rose 2.3%, with strong growth in the Latin America, Central & Eastern Europe, and South East Asia segments. WPP has reiterated guidance for 2019, targeting a fall in like-for-like less pass-through costs revenue of 1.5% to 2.0%. Online takeaway food platform Just Eat reported a 21% rise in orders for the first quarter of 2019 to 61.4 million, with revenue up 28% to GBP227.9 million. Just Eat's UK orders rose 7.3% to 31.9 million, with performance hurt by a strong comparative, unusually warm weather in February, and the Easter break entirely falling in the second quarter.Outside of the UK, orders surged 40%, helped by strong growth in Canada, Italy, Switzerland, and Ireland. Guidance for 2019 is once again reiterated, with Just Eat seeing revenue between GBP1.0 billion and GBP1.1 billion and underlying earnings before interest, tax, depreciation, and amortisation of GBP185 million to GBP205 million. Publisher Pearson reported a 2% rise in first quarter underlying revenue, with operating performance "on track". Sales in North America were up 2%, Core markets by 4%, and Growth markets flat. Pearson has held all 2019 guidance, with adjusted operating profit guided between GBP590 million and GBP640 million. In the FTSE 250, Computacenter said first-quarter revenue and profit were ahead year-on-year, before the "positive" impact of acquisitions. This is above expectations, given a tough comparative year-on-year.The UK saw revenue growth despite a large one-off deal a year prior, while US also achieved revenue growth on a like-for-like basis. Looking ahead, Computacenter is "firmly" on track to meet 2019 expectations, and confidence has increased following the first quarter performance. Insurer Hastings reported a 4% rise in gross written premiums to GBP235.5 million for the first quarter, with live customer policies up 3% to 2.75 million. Net revenue fell 1% to GBP183.1 million. Hastings also confirmed new Chief Financial Officer John Worth will join on May 10. Iron ore pellet maker Ferrexpo's auditor Deloitte has resigned with immediate effect, the company announced, with the company having recently published long-delayed 2018 results amid an investigation into payments to a charity in Ukraine. In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average closing 0.5% lower, the S&P 500 marginally lower, but the Nasdaq Composite up 0.2%.The UK earnings following a busy season in the US, with Amazon after the US close Thursday reported a rise in first quarter profit, to USD3.56 billion from USD1.63 billion, beating analyst consensus. Revenue climbed 17% to USD59.70 billion.Looking ahead, Amazon has guided for second quarter revenue of USD59.5 billion to USD63.5 billion, potentially beating analyst consensus of USD62.37 billion. Chipmaker Intel beat market expectations for both revenue and profit, with the former broadly flat at USD16.06 billion, though profit fell to USD3.97 billion from USD4.45 billion. However, looking forward, Intel's own expectations of revenue of USD69.0 billion and adjusted earnings of USD4.35 per share are both short of market forecasts of USD71.05 billion and USD4.51 respectively. Earlier Thursday, industrial firm 3M trimmed its guidance for 2019 adjusted earnings, while Windows operating system maker Microsoft and social network Facebook both reported solid results, beating analyst consensus.The Japanese Nikkei 225 index ended down 0.3% Friday. In China, the Shanghai Composite is off 0.8%, while the Hang Seng index in Hong Kong is flat.The economic calendar has UK BBA mortgage approval figures at 0930 BST and US first-quarter GDP at 1330 BST. "We're expecting to learn today the [US] economy expanded at a 2.6% annualized rate in the first quarter, rather better than we expected at the turn of the year. Our initial assumption was 1% to 2%, and above the consensus of 2.3%," said Ian Shepherdson of Pantheon Macroeconomics."In the 10th year of an economic expansion, and especially given the fading push from fiscal easing, a 2.6% growth rate is very respectable." "And note whatever the number prints, it is a pretty good bet actual growth was stronger, because a long-standing seasonal adjustment problem tends to depress reported growth in the first quarter," he added.