Here we go! Earnings season is underway

Microsoft's pandemic bump still isn't over.

The tech giant on Tuesday reported revenue of $41.7 billion for the three months ended March 31, up 19% from the same period in the prior year and slightly ahead of the $41 billion Wall Street analysts had projected. It also beat on the bottom line: posting profit of $14.8 billion, or $1.95 per share, compared to analysts' projection of $13.5 billion.

Despite the earnings beat, Microsoft (MSFT) stock tumbled as much as 4% in after hours trading Tuesday. Microsoft's stock has been inching higher for much of the past week as the company's market cap nears $2 trillion.

Wedbush analyst Dan Ives called the after hours selloff a "knee jerk reaction" by investors who were hoping for an even bigger revenue beat. However, the earnings report contained quite a bit of good news.

Microsoft's cloud platform, Azure, posted revenue growth of 50%, maintaining its strong growth rate from the December quarter. And its cloud growth is expected to continue, as companies accelerate adoption of the technology to help manage hybrid remote and in-office workforces following the pandemic.

Microsoft's commercial bookings — which point to future revenue opportunities — grew 39% during the March quarter, and included an increase in the number of "larger, long-term Azure contracts," the company said.

Ives said in an investor note last week that he expects global cloud spending to approach $1 trillion over the next decade, and that longtime market leader Amazon Web Services and Microsoft Azure will likely be the two biggest players competing for that business. 

“We strongly believe the tide is shifting in the cloud arms race,” Ives said, adding that Microsoft is “clearly taking market share vs. AWS based on our analysis.”

Gaming was another highlight from the quarter, thanks to the popularity of Microsoft's new Xbox S and X consoles and increased demand because the pandemic. Quarterly Xbox hardware sales grew 232%, and Xbox content and services sales were up 32%.

The earnings report comes two weeks after Microsoft announced a $16 billion acquisition of Nuance, an artificial intelligence developer for health care, an industry that’s expected to be a major customer for cloud providers.

“This deal allows Microsoft to gain wider access to the health care industry and potentially sell  additional services to Nuance's customers,” Edward Jones senior research analyst Logan Purk said in a note to investors ahead of the earnings release.

Correction: A previous version misstated Microsoft's total quarterly revenue. It is $41.7 billion.

After a difficult year, Starbucks' US sales are finally bouncing back.

Sales at US stores open at least 13 months jumped 9% in the three months ending March 28 compared with the same period last year. The results pointed to a "full sales recovery" in the United States, CEO Kevin Johnson said in a statement Tuesday.

Globally, same-store sales increased 15%, missing Wall Street's expectations of 16.8% growth. Shares of the company fell about 2% after the bell.

While some restaurants, like pizzerias, have seen sales soar during the pandemic, cafes like Starbucks (SBUX) have struggled. Stay-at-home orders disrupted people's regular commute to work, and many started drinking their morning coffee at home instead of buying it to-go.

In the last three months of 2020, Starbucks' US same-store sales fell 5%. In fiscal year 2020, the year leading up to late September 2020, US same-store sales fell 12%.

General Electric’s revenue tumbled by more than feared at the start of 2021 as the jet engine maker continues to struggle during Covid-induced travel woes.

GE (GE) CEO Larry Culp described a “still difficult environment” for aviation, where the company's orders slumped 26% from a year ago. Commercial service orders dropped by 40% as there were fewer shop visits and lower spare parts sales as air travel remained weak

GE’s power business also missed expectations, suffering a 3% dip in revenue as coal-fired power plant orders declined amid the shift to cleaner energy. By contrast, renewable energy orders jumped, driven by wind turbines.

Overall, GE’s first-quarter revenue declined 12% to $17.1 billion, missing estimates. Adjusted profits rose to 3 cents per share.

GE shares fell about 3% in premarket trading, giving back a slice of their big 2021 gains.

GE’s industrial businesses burned through another $845 million during the first quarter. However, that was a significant improvement from a year ago when GE burned through $2.2 billion at the onset of the pandemic.

Despite the struggles, GE reiterated its outlook for the rest of the year, predicting industrial free cash flow of $2.5 billion to $4.5 billion.

BP will return cash to shareholders after its profits more than doubled in the first quarter and it cut its debt pile.

The oil company said in a statement on Tuesday that it will spend $500 million on share buybacks in the second quarter and remains committed to returning at least 60% of surplus cashflow to investors. The stock rose 2% in London.

In the three months to March, BP’s underlying profit on a replacement cost basis — the measure of income tracked most closely by analysts — jumped to $2.6 billion from $791 million during the same period last year.

“This result was driven by an exceptional gas marketing and trading performance, significantly higher oil prices and higher refining margins,” BP said.

Net debt fell by $5.6 billion to $33.3 billion at the end of the quarter, helped by the sale of oil and gas assets worth $4.8 billion.

“With the acceleration of divestment proceeds, together with strong business performance and the recovery in price environment, we generated strong cash flow and delivered on our net debt target around a year early,” CEO Bernard Looney said in the statement.

BP reported a loss of $5.7 billion in 2020, its first annual loss in a decade, as the economic toll from the coronavirus pandemic forced oil companies to write off billions of dollars of assets.

The British oil major unveiled plans last August to slash oil and gas production and channel vast amounts of money into clean energy.

HSBC enjoyed a better-than-expected first quarter as the global economic recovery gained traction.

The UK bank said Tuesday that pre-tax profit jumped 79% to $5.8 billion in the three months ended March, despite revenue dipping 5% to $13 billion.

HSBC said the improving economy allowed it to release $400 million that had been set aside to cover pandemic losses. All regions were profitable, and the United Kingdom was a bright spot — pulling in more than $1 billion in pre-tax profit.

"We had a good start to the year," CEO Noel Quinn said in a statement Tuesday. "The economic outlook has improved, although uncertainties remain."

The lender has been restructuring as it works to recover from the impact of the coronavirus pandemic. It announced in February that it would push harder into Asia, particularly China, southeast Asia and India.

In 2020, HSBC's pre-tax profit fell to $8.8 billion, a 34% slump compared to the year before. It has been especially hit hard by record low interest rates, prompting it to place more emphasis on fee-generating businesses.

HSBC's stock in Hong Kong rose 1.9% on Tuesday, while its shares in London ticked up 1.1%.

Snapchat’s pandemic-linked bump in user growth is still going strong. 

Snap Inc. (SNAP), the parent company of the photo sharing app, reported a 22% year-over-year increase in daily active users, its highest growth rate in over three years. The app’s daily users now total 280 million.  

That contributed to quarterly revenue of $77 million, up 66% from the same period in the prior year. Snap also posted its first-ever quarter of positive free cash flow as a public company, which reached $126 million — a milestone as the company works toward profitability. The company reported a net loss of $287 million. 

Snap’s stock rose more than 6% in after-hours trading Thursday following the report. 

“The strength of our business underscores our relentless focus on product innovation and is a testament to our team’s ability to execute well together over the long term,” CEO Evan Spiegel said in a statement.

The company reported a 40% increase in daily engagement with its augmented reality lenses, a key element of its strategy to attract sponsors and keep users on the app longer. 

But there may be challenges ahead: Analysts wonder whether people will keep using Snapchat as frequently as the pandemic comes to an end. And privacy changes in Apple's forthcoming iOS14.5 could pose risks, too.

"Apple will require any app that collects and shares users’ data for tracking purposes to explicitly ask for and get the user’s permission to track them or access their device’s advertising identifier," Tom Johnson, chief transformation officer at Mindshare Worldwide, said in emailed commentary. "The big unknown is how many people will opt-out and this could have a big impact on Snap’s ability to prove the impact of its advertising."

Strong PC demand caused by the pandemic help Intel (INTC) beat Wall Street’s expectations for its sales during the first quarter of 2021. 

The company on Thursday reported quarterly revenue of $18.6 billion, flat from the same period in the prior year but well ahead of analysts’ projections. Intel’s non-adjusted earnings per share hit $1.39, down slightly from the year-ago period and also ahead of the $1.15 analysts predicted. 

The results were buoyed by a 38% increase in PC unit sales and record notebook unit sales.

Intel’s stock initially fell nearly 2% in after hours trading Thursday. The stock reaction could point to pressure on Intel’s new CEO, Pat Gelsinger, to successfully execute his turnaround plan. 

This is Gelsinger’s first earnings report as Intel’s chief executive, though he spoke on the company’s January earnings call prior to taking the helm, during which he said he wanted Intel to regain its position as the “unquestioned leader” in the semiconductor industry.   

Last month, Gelsinger announced several major initiatives, collectively referred to as “IDM 2.0”: A $20 billion investment in two new chipmaking facilities; the launch of a new business unit called Intel Foundry Services to manufacture other companies’ chips; and a plan to outsource some production of its most advanced processors. 

And last week, following a meeting convened by the White House to address the current semiconductor shortage, Gelsinger said Intel was in talks to manufacture chips for automakers within the next six to nine months to help alleviate the supply chain squeeze. 

On Thursday, investors will likely also be looking for signs of improvement in Intel’s manufacturing delays for the smallest, most powerful chips  — which have caused it to fall behind Asian chipmakers. 

The company raised its guidance for full-year 2021 to earnings of $4.60 per share on revenue of $72.5 billion.

Strong demand for coffee, baking products and prepared meals lifted Nestlé’s first-quarter sales, as consumers continued to spend more time at home. 

The world’s largest food company on Thursday reported organic sales growth of 7.7% for the first three months of the year compared to the same period in 2020.

“Coffee was the largest contributor to growth, fuelled by strong demand for Nespresso, Nescafé and Starbucks products,” Nestlé said in a statement.

Nespresso sales surged 17% to 1.6 billion Swiss francs ($1.7 billion).

Elevated demand for home-baking products helped dairy grow at a double-digit rate, with prepared dishes and cooking aids posting similar gains.

Sales of pet food, including Purina PetCare, also boosted growth, Nestlé said.

“We are pleased with Nestlé’s strong organic sales growth in the first quarter, building on broad-based contributions from most geographies and product categories,” CEO Mark Schneider said.

Consumer goods companies such as Nestlé, Unilever and Procter & Gamble have performed strongly during the coronavirus pandemic, as lockdowns forced consumers to prepare meals at home, and boosted demand for cleaning and hygiene products.

Nestlé’s total sales grew 1.3% to 21.1 billion Swiss francs ($23 billion) as a result of the appreciation of the Swiss franc against other currencies.

Credit Suisse is seeking to raise roughly 1.8 billion Swiss francs ($2 billion) from investors to strengthen its balance sheet as losses mount from the collapse of hedge fund Archegos Capital Management.

The Swiss bank said in a statement that it would sell convertible notes to shareholders on Thursday to raise the capital.

Losses stemming from Archegos' collapse wiped out what would have been a strong quarter, with revenues climbing 31% over the same period last year. Credit Suisse reported a loss of 757 million Swiss francs ($827 million) for the January-March period.

The bank took a hit of 4.4 billion Swiss francs ($4.8 billion) from Archegos' implosion in the first quarter, and said it expects to book an additional 600 million Swiss francs ($655 million) in losses later this year.

“The loss we report this quarter, because of this matter, is unacceptable,” CEO Thomas Gottstein said in the statement.

Credit Suisse announced earlier this month that its top investment banker, Brian Chin, and chief risk officer Lara Warner would both be leaving the bank. Other members of the executive board will not receive bonuses for 2020, and board chairman Urs Rohner will give up 1.5 million Swiss francs ($1.6 million) in compensation.

Archegos is the second major stumble for Credit Suisse in recent months.

In March, Credit Suisse froze $10 billion in investment funds connected to failed UK supply chain finance firm Greensill Capital, which provided cash advances to companies owed money by customers.

Credit Suisse clients invested in the funds could suffer considerable losses.

Switzerland’s financial regulator, Finma, said in a statement on Thursday that it was investigating Credit Suisse for potential risk management shortcomings in relation to Archegos and Greensill.

The regulator said it has ordered various short-term measures be put in place, including “risk-reducing measures and capital surcharges,” as well as reductions or suspensions of bonuses.