Reckitt Benckiser (Q4 results)
Investors will be hoping that the problems in some emerging markets in 2016 notably Russia and Korea are now over. There may be more comment on its recent acquisition of baby-food maker Mead Johnson, which some analysts feel was fully priced. Other areas to focus on will be cost controls as well as the performance of new products and their effect on profits and margins. Also worth noting are the sales in the US and China, which are the group’s two largest revenue sources.
Rolls-Royce (Q4 results)
The newsflow surrounding Rolls Royce in recent months has been dominated around the bribery scandal, although the full year results will be an opportunity for the focus to return to the company’s operations. However, all isn’t rosy as the market believes that sales for the year will be down slightly as sales of new engines have cannibalised older models. Furthermore, sales of regional jets have weakened while the marine division feels the impact of lower oil prices. Group profits will also hurt by FX hedges that have gone wrong because of Brexit. Nevertheless, it’s the forward looking statement on potential new contracts, progress on group restructuring and lowering costs that will be more important.
TUI (Q1 results)
This is an important time of year for the world’s largest tourism group as many people are planning and booking their summer holidays. In December the company said trading for the winter and summer 2017 seasons was in line with expectations. The market will also be interested in any further news on the joint venture with Etihad Airways to create a new airline, as well as any comments on the new investigation into hotel accommodation by the EU Commission.
Coca-Cola (Final results)
There have been some encouraging signs in European markets and emerging markets such as Nigeria for the soft drinks bottling group. This is in spite of the last trading update in November which showed a 1% fall in overall volumes in the third quarter and a 1.9% decline in revenue. The group said previously that it was expecting to see good growth for the current year and has set a longer term target of 4.5% average annual revenue growth.
Shire (Q4 results)
We will expect to see a big boost to sales this year due to currency movements but also as a result of the integration of recent acquisitions made, which will have a short term impact on earnings due to costs. Also worth noting will be the level of short term prospects and the level of generic competition faced by one of its key drugs, ADDERRALL. However, new drugs are coming online and investors will be keen to see what progress is being made with FDA approvals. Comments surrounding possible drug price controls by the new US administration will be sought out along with the integration progress on Baxalta and NPS acquisitions.
Announcements for the w/c 13 February:
14 February, UK consumer price inflation: January 2017 – Office for National Statistics
In December, UK Inflation rose sharply to 1.6%, but there is a good chance it increased even higher than this in January. Month on month inflation in January 2016 was minus 0.8%. When this data falls out of the equation that defines the annual inflation rate, to be replaced with month on month inflation data for January 2017, even if prices were flat last month, the annual rate will pass 2%. Inflation may well hit its highest level since 2013.
14 February, Flash Estimate EU and euro area GDP – Eurostat
Recent surveys indicate that the Eurozone economy may currently be growing at its fastest pace for some time, and faster than the UK. Will today’s data confirm this?
15 February, US Consumer Price Index, January – Bureau of Labor Statistics
Although US inflation has been rising rapidly recently, the core rate, which the Federal Open Market Committee tends to focus on when making its interest rate decisions, has been pretty flat for over two years, fluctuating between 2% and 2.2%. Will core inflation remain within this band?
15 February, UK productivity flash estimate: October to December 2016 – Office for National Statistics
Productivity has been called the most important of all economic drivers, as it sets the speed limit for economic growth. In Q3, UK output per hour rose by 0.4%, which was the fastest growth rate since Q2 2015. Was this rate of growth maintained during the final quarter of the year?
15 February, UK labour market statistics: February 2017 – Office for National Statistics
With inflation set to rise, all eyes turn to average wages. Can wage increases keep pace with price inflation? In the three months to November, average wages with bonuses rose by 2.8%, this was a one of the fastest rates of growth in a long time, but even so, with many economists forecasting 3% inflation later this year, wages will need to rise even faster in order to avoid negative growth in real wages.
Further announcements include:
- UK House Price Index: December 2016 – Office for National Statistics
- Labour Productivity, 1998-2015 – Office for National Statistics
- Retail Sales in Great Britain: Jan 2017 – Office for National Statistics