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Tuesday May 17, 2022



Pfizer Reports First Quarter Earnings

Pfizer Inc. (PFE) reported first quarter earnings on Tuesday, May 4. The biopharmaceutical company exceeded earnings estimates, but shares fluctuated later in the week after the White House voiced support for a waiver of intellectual property protections on COVID-19 vaccine patents.

Pfizer announced revenue of $14.6 billion for the quarter, up 45% from $10.1 billion in the same quarter last year. Revenue exceeded analysts' expectations of $13.51 billion.

"I am extremely proud of the way we have begun 2021, delivering strong financial results in the first quarter," said Pfizer CEO Dr. Albert Bourla. "Even excluding the growth provided from [the COVID-19 vaccine], our revenues grew 8% operationally, which aligns with our stated goal of delivering at least a 6% compound annual growth rate through 2025."

The company reported first quarter earnings of $4.9 billion or $0.93 per share, exceeding analysts' expectations of $0.77 per share. This is up from earnings of $3.4 billion, or $0.63 per share, reported during the same quarter last year.

The New York-based company reported $3.5 billion of its quarterly revenue was generated by its COVID-19 vaccine. Revenue for the Rare Disease segment increased 29% year-over-year from $639 million to $824 million. Growth in this segment was driven by an 88% operational increase in quarterly revenue from the heart drugs Vyndaqel and Vyndamax. During the first quarter, the company paid a dividend of $0.39 per share of common stock. The company updated its 2021 financial guidance to reflect revenues of $70.5 billion to $72.5 billion, up from previous estimates of $59.4 billion to $61.4 billion.

Pfizer Inc. (PFE) shares ended at $39.58, up 1.3% for the week.

Uber Reports Earnings

Uber Technologies, Inc. (UBER) reported its quarterly financial results on Wednesday, May 5. The San Francisco-based ride-hailing company beat earnings expectations but fell short on revenue.

The company reported second quarter net revenue of $2.9 billion, down 10.6% from $3.2 billion reported in the same quarter last year. Analysts expected revenue to reach $3.27 billion.

"Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings," said Uber CEO Dara Khosrowshahi. "We will continue to innovate and find new ways to deepen engagement with our customers, as the only global platform that helps you go wherever you need and get whatever you want."

Uber's net loss for the quarter was $108 million, or $0.06 per share. In the same quarter last year, the company reported a net loss of $2.9 billion, or $1.70 per share. Analysts predicted a loss of $0.56 per share.

Uber's quarterly revenue was reduced by a $600 million accrual for the settlement of claims related to the classification of drivers in the United Kingdom. In March, Uber announced it would treat drivers as "workers" under UK labor law. This classification would allow drivers to earn at least minimum wage, receive holiday pay and in some cases become eligible for a pension plan. Net loss was offset by the sale of Uber's ATG division, the company's self-driving technology unit. Gross bookings for the quarter grew to $19.5 billion, up 24% from $15.8 billion at the same time last year.

Uber Technologies, Inc. shares ended the week at $47.03, down 14.7% for the week.

T-Mobile Reports Quarterly Earnings

T-Mobile US, Inc. (TMUS) released its first quarter earnings report on Tuesday, May 4. The wireless network provider exceeded revenue estimates and reported strong customer growth.

Revenue came in at $19.76 billion for the quarter. This was up from $11.11 billion last year and exceeded analysts' expected quarterly revenue of $18.9 billion.

"T-Mobile puts customers at the center of everything we do by giving them the best network, value and experience all at once – and this quarter's stellar, industry-leading results prove that they're noticing," said T-Mobile CEO Mike Sievert. "Our network leadership is fueling customer momentum, delivering merger synergies and expanding our addressable markets for growth. We have so much confidence that we are raising 2021 guidance just one quarter into the year. Our mission is to be the very best at connecting customers to their world and we're delivering on it."

The company posted net earnings of $933 million for the quarter, or $0.74 per share. This was down from $951 million at this time last year but surpassed analysts' estimates of $0.57 per share.

T-Mobile's recent financial results reflected the impact of the Sprint merger that closed in April 2020, whereas the historical results provided only reflect T-Mobile and were not adjusted. The year-over-year revenue increase was driven by the merger and continued customer growth, but earnings decreased slightly due to merger-related costs and a higher number of outstanding shares as a result of the merger. The company reported net customer additions of 1.4 million in the first quarter, bringing total customer count to 103.4 million.

T-Mobile US, Inc. (TMUS) shares ended the week at $139.12, up 4.9% for the week.

The Dow started the week at 33,905 and closed at 34,778 on 5/7. The S&P 500 started the week at 4,192 and closed at 4,233. The NASDAQ started the week at 14,032 and closed at 13,752.

U.S. Treasury Yields Decrease

U.S. Treasury yields increased slightly after weekly jobless claims dropped to the lowest level in over a year. However, yields fell on Friday after the April jobs report from the Bureau of Labor Statistics indicated the number of new jobs fell significantly below expectations and unemployment rates were relatively unchanged.

On Thursday, the Department of Labor reported that initial jobless claims fell to 498,000, down 92,000 from the previous week and below analysts' estimate of 527,000. Continuing claims were up 37,000 to 3.69 million.

"Talking of the Fed, the speakers so far this week have offered a mixed bag of comments regarding inflation and the prospect of tapering the central bank's [quantitative easing] program," said BNY Mellon macro strategist John Velis. "The labor market is key to this debate, and Friday's data will likely make good reading on that front. If we do get a print close to a million new jobs, it will likely mean that the services sector, especially leisure and hospitality, will show the biggest gains."

The 10-year Treasury note opened the week of May 3 at 1.625% and reached a low of 1.49% during trading on Friday. The 30-year Treasury bond yield opened the week at 2.29% and reached a low of 2.17% on Friday.

On Friday, the Department of Labor reported that total nonfarm payroll employment rose by 266,000 in April, despite forecasts of 978,000 new jobs. The report noted that while the unemployment rate of 6.1% is down considerably from one year ago, it is still well above the unemployment rate of 3.5% reported in February 2020.

"To put it mildly, [Friday's] report did not meet expectations. This might be one of the most disappointing jobs reports of all time," said Indeed economic research director Nick Bunker. "The labor market needs to gain 8.2 million jobs to put us back where we were pre-pandemic, not accounting for the jobs that would have been created if the pandemic never happened. Every month job gains don't accelerate puts us further behind."

The 10-year Treasury note yield closed at 1.58% on 5/7, while the 30-year Treasury bond yield was 2.28%.

Mortgage Rates Decrease

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, May 6. Mortgage rates dropped slightly this week.

This week, the 30-year fixed rate mortgage averaged 2.96%, down from last week's average of 2.98%. Last year at this time, the 30-year fixed rate mortgage was at 3.26%.

The 15-year fixed rate mortgage averaged 2.30% this week, down from 2.31% last week. During the same time last year, the 15-year fixed rate mortgage averaged 2.73%.

"Mortgage rates have remained under 3% for three consecutive weeks," said Freddie Mac Chief Economist Sam Khater. "Consumer income and spending are picking up, which is leading to an acceleration in economic growth. The combination of low and stable rates, coupled with an improving economy, is good for homebuyers. It's also good for homeowners who may have missed prior opportunities to refinance and increase their monthly cash flow."

Based on published national averages, the national savings rate was 0.06% as of 4/19. The one-year CD averaged 0.14%.

Published May 7, 2021

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