US tech and UK banks head earnings bonanza, Fed rate meeting

Earnings

Big tech

Advertising figures will be in the spotlight when Google’s parent Alphabet reports this week. An unexpected surge of advertising in the final months of last year lifted Google’s revenues far above Wall Street forecasts.

Alphabet’s revenue grew 13 per cent for the year as a whole, even as non-digital sectors of the global advertising industry contracted about 20 per cent.

A boom in PC sales, surging demand for video-gaming and increased usage of cloud services are expected to drive up revenues for Microsoft.

Last quarter, the company produced a 17 per cent surge in revenue, to $43.1bn. The jump belied Wall Street expectations that the US software company’s growth rate would slow to less than 10 per cent.

Sales of iPads and in its wearables unit, which includes AirPods and the Apple Watch, are expected to boost earnings for Apple. 

Sales in all five of the $2.4tn company’s product categories grew at double-digit percentages in January, with the iPhone being the group’s slowest-growing category because of supply constraints and the delayed launch of its first 5G-enabled smartphones.

A push into ecommerce during coronavirus lockdowns bore fruit for Facebook, which posted record quarterly revenues in January. But the forecast might be uncertain for this quarter after chief executive Mark Zuckerberg warned of a growing competitive threat from Apple.

Zuckerberg cited Apple’s forthcoming privacy changes to the iOS 14 operating system, which requires applications on iPhones to obtain users’ permission to harvest advertisement targeting and tracking data.

Amazon’s initiative to ramp up its infrastructure to offer one-day shipping, the growth in other parts of the business and rising figures for its Prime subscriptions are expected to boost the ecommerce giant’s earnings.

Amazon’s earnings over the festive period far surpassed analysts’ expectations last quarter. The retailer exceeded revenue estimates, but it was strong net income that surprised investors most: $3.3bn versus a consensus of $1.97bn, according to data from S&P Capital IQ.

Banks

Barclays reports this week after suffering a 68 per cent plunge in the fourth quarter and warning that the long-term impact of coronavirus was still uncertain, with the true fallout disguised by government and central bank support programmes.

HSBC, which unveiled a strategic shift to Asia and retreat from the west, pledging to invest $6bn to expand in Hong Kong, China and Singapore, while selling its US retail arm and its French consumer bank, is publishing its earnings this week.

Lloyds, NatWest and Standard Chartered also report this week.

Provisions for bad loans and writedowns in the value of some of Santander’s businesses are expected to affect the lender’s results.

In February, the loss of €8.8bn was exacerbated by new costs related mainly to restructuring in Santander’s Spanish businesses in the fourth quarter. However, the bank predicted a rebound in profitability in 2021.

A surge in bond and rates trading revenue is likely to boost Deutsche Bank’s net profit, when Germany’s largest lender reports.

Last quarter, Deutsche made a net profit for the first time in six years on the back of a global trading boom. The bank reported a net profit of €113m for 2020, the first since 2014 and higher than expected by analysts. 

Payment groups Visa and Mastercard also report this week.

Energy

Some of the world’s biggest energy groups reported record annual losses in the last quarter, marking a brutal 12 months for an industry under mounting pressure to speed up a transition to cleaner fuels. Both ExxonMobil, the US’s biggest oil producer, and BP, the UK energy group, will update investors.

ExxonMobil racked up losses of more than $20bn last year — the first annual loss in its history, while BP recorded its first annual loss since the Deepwater Horizon disaster more than a decade ago after fourth-quarter profits plunged 96 per…