Pfizer reported better-than-expected profits during the first quarter due to steady demand for its COVID products.
The major U.S. stock index futures are trading lower shortly before the cash market opening on Tuesday as traders geared up for the start of the Federal Reserve’s May policy meeting.
At 13:00 GMT, the blue chip Dow Jones futures contract is at 34059.00, down 93.00 or -0.27%. The benchmark S&P 500 Index is at 4176.25, down 9.50 or -0.23% and the tech-weighted NASDAQ-100 is at 13297.75, down 9.00 or -0.07%.
The Federal Reserve’s May policy meeting is expected to conclude with another 25 basis-point rate hike, with traders pricing in a 97% chance of a rate hike according to the CME Group’s FedWatch tool. Investors are anticipating clues on whether the Fed will keep rates steady or tighten monetary policy further to combat inflation.
The Dow and Nasdaq Composite experienced slight losses in Monday’s session, with investors focused on the banking sector following JPMorgan’s acquisition of troubled First Republic Bank. Additionally, Treasury Secretary Janet Yellen warned that the U.S. may hit the debt ceiling as early as June 1, earlier than expected.
On the economic front, Wall Street will be watching for data on job openings, factory orders, and light vehicle sales.
The earnings season rolled on, with Uber and Pfizer reporting better-than-expected results. Uber shares popped nearly 7%, while Pfizer advanced more than 1%. Ford, Starbucks, Advanced Micro Devices and Caesars Entertainment are set to report after the bell.
Pfizer reported better-than-expected profits during the first quarter due to steady demand for its COVID products, and the company expects newer drugs to contribute to growth later this year. This led to a nearly 3% surge in premarket trading.
Pfizer exceeded expectations for Q1 profits due to steady demand for its COVID products, which included sales of the Comirnaty vaccine and antiviral pill that surpassed estimates.
The company confirmed its annual profit forecast of $3.25 to $3.45 per share and its COVID product sales outlook of around $21.5 billion. Pfizer is investing billions of dollars in research and acquisitions to offset anticipated revenue hits due to patent expirations and declining demand for COVID products, projected to decline by 2023.
Excluding COVID product sales, the company aims for 7-9% revenue growth this year, primarily in H2. Pfizer’s Q1 overall revenues fell by 29% to $18.3 billion, but the company’s performance exceeded expectations.
An analyst from Wells Fargo stated that they expected Pfizer to lower their 2023 COVID vaccine sales forecast further. However, the intact COVID guidance was a positive surprise. Pfizer anticipates Q2 COVID product sales will be substantially lower than Q1.
During premarket trading on Tuesday, Uber’s shares surged by 8.2% following the company’s better-than-expected results for the first quarter. According to Refinitiv data, Uber reported $8.82 billion in revenue, exceeding the consensus estimates of $8.72 billion.
The company also posted losses of 8 cents per share. This is less than the analysts’ estimate of 9 cents per share. In an interview with CNBC’s “Squawk Box,” CEO Dara Khosrowshahi stated that the company is committed to achieving GAAP operating profitability by the end of the year.
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James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.