Here we go! Earnings season is underway

Strong demand for electric and premium vehicles boosted Volkswagen’s first quarter profit as the company continued to rebound from the pandemic.

Europe’s largest carmaker said in a statement on Thursday that it delivered 2.4 million vehicles between January and March — a 21.2% increase on the same period last year when the coronavirus was raging in China, the group’s single largest market.

“A key driver of this increase in volume was China,” Volkswagen said. Sales in the country surged 61.4% over the prior period.

Increased sales, including of more expensive vehicles from Audi and Porsche, lifted revenue to €62.4 billion ($75.2 billion) — a 13% increase on the same period last year and 4% more than in 2019. Profit before tax jumped to €4.5 billion ($5.4 billion) from €700 million ($843.5 million) in the prior period.

“We started the year with great momentum and are on a strong operational course,” said Volkswagen CEO Herbert Diess. “Our e-offensive continues to gain momentum and we have significantly expanded it with attractive new models.”

Volkswagen wants to dethrone Tesla as the king of electric cars and is spending billions of dollars to do so. The company said on Thursday that it delivered 59,900 battery electric vehicles in the first quarter, a 78% increase over the previous year. Sales of plug-in hybrids increased 178% to 73,400.

In March, the company unveiled a massive expansion of battery production in order to secure supply and drive down production costs. UBS analysts said in a recent report that Volkswagen could match Tesla’s sales as early as next year and go on to sell 300,000 more battery electric vehicles than Tesla in 2025.

Volkswagen’s stock is up 45% this year.

The company has raised its forecast for operating profit this year, despite a global shortage of semiconductors which it expects to have a more significant impact in the second quarter.

Nintendo is still pulling in big profits as the Japanese video game company continues its pandemic-fueled hot streak. 

The video game and console maker on Thursday reported that operating profit hit nearly 641 billion Japanese yen ($5.9 billion) for the fiscal year ended March, up 82% from the previous year. That exceeded the $5.4 billion forecast by analysts polled by Refinitiv. 

The strong results were again thanks to software sales for its Switch devices, particularly the popular titles “Animal Crossing: New Horizons” and “Mario Kart 8 Deluxe.” Thanks to the popularity of its games, Nintendo sold 28.83 million Switch units during the fiscal year — up 37% compared to the prior year. 

Nintendo says it expects to pull in 500 billion Japanese yen ($4.6 billion) during the next fiscal year, a 22% drop over this one. It also warned that a global shortage of computer chips could hamstring production.

“The production of products might be affected by obstacles to the procurement of parts, including the increase in global demand for semiconductor components,” the company said, adding that its current forecast is based on the assumption that “we will be able to secure the parts needed for the manufacture of products in line with our sales plans.”

Nintendo shares have increased 66% since March 2020 thanks to a surge in demand for home entertainment during the pandemic.

Carlos Brito is stepping down as CEO of Anheuser-Busch InBev after 15 years of furious dealmaking that created the world's largest brewer.

Michel Doukeris, who currently heads up its North America business, will succeed Brito on July 1, the company said in a statement on Thursday.

The consummate dealmaker, Brito took over US giant Anheuser-Busch in 2008 before acquiring Mexico's Grupo Modelo and orchestrating the $104 billion takeover of Anglo-South African brewer SABMiller in 2016.

“Brito was the architect who led and built AB InBev into the world’s leading beer company and a leading global consumer packaged goods company by masterfully integrating the many businesses that comprise AB InBev today,” AB InBev chairman Martin Barrington said in a statement.

Doukeris has been with AB InBev for over a decade, serving as president of the Asia Pacific division and as the company’s chief sales officer before becoming president of its North America business.

“Michel Doukeris is uniquely suited to accelerate AB InBev’s transformation and lead its next chapter of growth,” the company said.

The brewer of Budweiser, Corona and Stella Artois said that sales volumes grew 13.3% in the first three months of the year compared to the same period in 2020. Earnings increased 14.2% off the back of revenue growth of 17.2%.

“Our business is off to a very strong start in 2021,” it added.

Warren Buffett's Berkshire Hathaway, much like the rest of the stock market and economy, has made a huge comeback from the depths of the Covid-19 pandemic.

Berkshire Hathaway (BRK.B) announced Saturday that it had posted a net profit of $11.7 billion during the first quarter. A year ago, the Oracle of Omaha's conglomerate reported a nearly $50 billion loss.

Berkshire Hathaway said in a regulatory filing that the company's manufacturing, services and retail businesses have "experienced significant recoveries" in the past few months.

Still, Buffett and Berkshire Hathaway are continuing to be conservative with the company's massive financial resources. Berkshire Hathaway bought nearly $6.6 billion of its own stock during the quarter and also boosted its cash hoard to a whopping $145.4 billion.

Read more about Berkshire Hathaway's latest quarterly results

The deep freeze in Texas in February dented ExxonMobil's bottom line to the tune of nearly $600 million.

Exxon (XOM) said Friday the deadly weather event knocked out production, drove lower sales and boosted repair costs. The largest US oil company said all impacted facilities are back online.

The extreme weather did not stop Exxon from swinging to a first-quarter profit of $2.7 billion, a vast improvement from a loss of $610 million a year ago. Exxon lost $22.4 billion last year -- its first annual loss since the 1999 merger that created the behemoth.

The sharp rebound was driven in large part by higher oil prices, which boosted upstream profits by $1.7 billion.

After years of being forced to borrow to afford its dividend, Exxon said its $9.3 billion of cash flow from operating activities "fully funded" both its dividend and capital spending.

Moreover, Exxon was able to shrink its pile of debt, reducing debt by $4 billion.

Even though Goldman Sachs is calling for record-breaking oil demand growth as the economy recovers, Exxon is not ramping up its spending plans. The company said if conditions continue to improve it will use additional cash to pay down debt.

Barclays’ first quarter profit almost tripled following a strong performance from its investment bank and a reduction in charges for bad loans related to the coronavirus pandemic.

Net income jumped to £1.7 billion ($2.4 billion) during the first three months of the year, from £600 million ($834.5 million) for the comparable period last year.

Revenue fell 6% to £5.9 billion ($8.2 billion) due to low interest rates and weak demand for credit cards and loans in the United Kingdom, Barclays said in a statement on Friday.

“Headwinds to income in Barclays UK are expected to persist in 2021, driven by subdued demand for unsecured lending and the low interest rate environment,” it added.

While earnings beat analyst expectations, the stock lost as much as 5.8% in London.

Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, said in a research note that this could be due to mounting concerns about operational costs at the bank, which were up 10% on the same quarter last year.

Barclays’ strong overall performance was helped by a significant reduction in bad debt charges, which plummeted to £100 million ($139 million) from £2.1 billion ($2.9 billion) a year earlier, when UK banks hiked reserves for potential pandemic losses.

“While evidence of recovery is encouraging, we have continued to take a cautious view of the impact of the pandemic on the business,” CEO Jes Staley said. Pre-tax profit at the corporate and investment bank jumped 46% to £1.75 billion ($2.4 billion). That was driven by record quarterly revenue in equities, up 65%, and capital markets and advisory, up 35%.

Fixed income, currency and commodities revenue decreased 35% following a very strong comparable quarter last year, Barclays said.

The result will provide a boost to Staley’s conviction that the investment banking unit is critical to Barclays’ future success.

“Barclays investment arm is clearly still providing the financial cushion needed as its consumer business finds its feet again,” said Streeter.

Amazon's profits more than tripled in the first quarter of 2021, as the pandemic continued to boost its online retail, cloud and advertising businesses.

The tech giant on Thursday reported a whopping $8.1 billion in quarterly net income, up 224% from the same period in the prior year, crushing Wall Street analysts' prediction of $4.98 billion. Earnings hit $15.79 per diluted share.

Total net sales from the quarter grew 44% from the year-ago period to $108.5 billion, also beating the $104.5 billion analysts had projected.

Amazon (AMZN) shares spiked as much as 4% in after-hours trading.

"Amazon has the almost perfect business for the world right now," James Harris, global chief strategy officer at Mindshare Worldwide, said in an email following the report. "The world’s leading e-commerce platform, a growing cloud business and a smaller but growing advertising capability all working in unison. It’s a compelling offer."

The company's cloud unit and biggest money maker, Amazon Web Services, posted net sales of $13.5 billion during the quarter, up 32% year-over-year, an acceleration in growth from the prior quarter as more companies adopt the technology to help manage hybrid workforces.

Among the other highlights from the quarter: Amazon now has more than 200 million paid Prime subscribers and streaming hours on Prime Video are up more than 70% year-over-year. 

Despite a tough year-over-year comparison because of the surge in demand the pandemic caused last year, Amazon still expects net sales between $110 and $116 billion, up 24% to 30% from the same period in the prior year, during the second quarter of 2021, assuming that its annual Prime Day event occurs during the quarter as normal.

On Wednesday, the day before the earnings report, Amazon announced it would spend $1 billion to raise wages for more than 500,000 hourly workers by as much as $3 an hour as it continues its hiring push that has elevated its global workforce beyond 1.3 million people globally. The company will not, however, increase its $15 per hour minimum wage. 

Earlier in the first quarter, Amazon faced a landmark union drive at a warehouse in Alabama that drew intense scrutiny to its labor practices. Despite popular support from celebrities and even President Joe Biden, the union vote was unsuccessful.

The latter part of this year will bring a major leadership shakeup at the company, as Amazon founder Jeff Bezos steps down from his role as chief executive, to be replaced by current Amazon Web Services CEO Andy Jassy, and the cloud unit gets a new leader. 

McDonald's entered the chicken sandwich wars this year, and it appears to be paying off.

Sales at US McDonald’s locations open at least 13 months jumped 13.6% in the first quarter compared to the same period last year. Analysts expected a more modest 9.3% spike. The company's total revenue was $5.12 billion in the quarter.

McDonald’s attributes the increase to a number of factors: customers spending more on delivery and through the company’s digital channels, as well as to its national menu. 

As of earlier this year, that menu includes three new fried chicken sandwiches. Those offerings are designed to better compete with rivals like Popeyes and Chick-fil-A, which have had success with their popular chicken sandwiches.

So far, the product's performance is "exceeding our projections," said Joe Erlinger, president of McDonald's USA, during a Thursday call discussing the earnings results.

"We are selling substantially more chicken sandwiches compared to our previous chicken sandwich line," he said. Partially, that's because the new sandwiches' spicy flavor profile is on trend, he said.

And the company is planning to roll out more chicken products, said CEO Chris Kempczinski.

McDonald's (MCD) also recently announced the latest in its line of successful celebrity meals: The BTS meal, which includes Chicken McNuggets, two new dipping sauces, medium fries and a Coke, will arrive in the US late next month. The company has already partnered with two other musicians, J Balvin and Travis Scott, on their own respective meals. The Travis Scott meal was so popular, McDonald's ran out at some locations.

But the initiatives haven’t brought more people into McDonald’s: Even though customers spent more per order, guest count was negative in the first quarter. Sluggish traffic was a problem for McDonald’s even before the pandemic.

Unilever’s share price rallied on Thursday after first quarter sales beat expectations and the consumer goods giant said it would return €3 billion ($3.6 billion) to shareholders.

The stock gained 3.1% in London to reach £42.06 ($58.66) per share.

Sales during the first three months of the year climbed 5.7% compared to the same period in 2020 to €12.3 billion ($14.9 billion), Unilever said in a statement.

“Unilever has made a good start to the year,” said CEO Alan Jope. “We are confident that we will deliver underlying sales growth in 2021.”

The strong performance — which was 2% ahead of analyst consensus — was driven by double-digit sales growth in China and India following strict lockdowns the previous year.

Volumes in Europe were negatively affected by lockdowns, which dented demand for personal care products but lifted in-home ice cream sales, Unilever said.

In North America, sales were boosted by continued demand for food consumed at home.

“Unilever gains much of its strength through the group’s diversity,” Steve Clayton, a fund manager at Hargreaves Lansdown, said in a research note.

“It sells globally, so in times like these, when European sales are in decline, growth in the United Kingdom and Asia can pick up the slack,” he added.

Unilever will begin a share buyback program of up to €3 billion ($3.6 billion) next month to be completed by the end of the year. Buybacks are one method of returning funds to shareholders.

The company said that plans to spin off its €2 billion ($2.4 billion) tea business, which could involve an IPO, are on track.