Companies announcing their results next week

Graham Spooner, investment research analyst at The Share Centre, gives his thoughts on what to expect from companies announcing their results next week, the week commencing 1 May 2017.

Companies announcing their results next week

Tuesday

Companies reporting today include – BP (Q1 results), Shire (Q1 results)

Wednesday

J Sainsbury (Q4 results)

The market will be focused mainly on two areas in these full-year figures from Sainsbury. Firstly, looking to see if the divergent performance of Argos and the rest of the group, as highlighted in March, has continued into the new financial year. Secondly investors will be interested in any comments on the outlook for this year given recent signs of rising inflation and falling retail sales.

Paddy Power Betfair (Q1 trading update)

In its last trading update in March the betting group said trading for the year to that point had been in line with expectations. The full-year results left some investors unimpressed due to some weaker trends in the final quarter of last year so the market will be watching closely to see if those have continued into 2017 and how the company performed during the Grand National and Cheltenham festival. There was some rare good news on the regulatory front recently as the EU Commission announced that offshore betting groups will have to pay a new levy.

Companies also reporting today include – Imperial Brands (Q2 results), Direct Line Group (Q1 results), Sage (Q2 results), Intu Properties (trading update)

Thursday

Convatec (trading update)

The shares listed on the market late last year with a market cap that was large enough to enter the FTSE 100. Initially investors seemed uncertain but since the group’s full year results published in early March the shares have leapt by roughly 10%. The group supplies medical consumables to the healthcare industry which is set for steady growth given ageing societies and the prevalence of people living for longer with chronic conditions.

G4S (Q1 trading update)

Shares in the security group have performed well so far this year, boosted by some strong full-year results in March. Pre-tax profits and revenues rose but the dividend for the year was left unchanged. Around 80% of revenue comes from outside the UK, with the US being its most profitable market. Any update on the long term group transformation program will also be of interest, as well as the latest figure for the bid pipeline of future business which stood at £6.8bn in March.

HSBC (Q1 results)

Banking giant HSBC faces many of the same challenges as its peers in the sector including political and regulatory issues as well as the uncertainty of Brexit and a slowing Chinese economy. Final results in February came in below market expectations, as a result of lower revenues and write-downs, but the dividend was held. Good figures recently from peer Standard Chartered have raised expectations for HSBC’s own first quarter update, and rising US rates should also help the sector more broadly. Investors will want to see more progress on cost reductions but the yield remains one of the best.

Inmarsat (Q1 results)

After a difficult few years, recent trading updates have been a little more encouraging and investors will be hoping this momentum has continued into the first quarter of 2017. The Government and Aviation divisions have been performing well and there is some hope that maybe the worst is over for the Maritime and Enterprise divisions. Investors should expect to see more airlines sign up to in-flight broadband services. The group raised $1bn for capex purposes and investors will therefore look to see how this capital is being spent.

Royal Dutch Shell (Q1 results)

With average oil prices in Q1 2017 ahead of the same period last year we should see an improvement in underlying profitability. We should also see comments around how the company has continued to reduce its costs of operations along with the synergies from integrating the BG operations. However, as the group continues to offload assets to pay down the debts we may see this impact on total production rates and therefore group revenues. It would be interesting to see if the short term issues within the refining market have improved.

Companies also reporting today include – Glencore (Q1 production report), Wm Morrison Supermarkets (Q1 trading statement), Next (trading statement), Randgold Resources (Q1 results), RSA Insurance (Q1 trading update)

Friday

Companies reporting today include – easyJet (results), Intercontinental Hotels Group (Q1 trading update), Pearson (Q1 trading statement), Smith & Nephew (Q1 trading report)

Economic Diary

Announcements w/c 1 May 2017

2, 3 and 4 May, Purchasing Managers Indexes, manufacturing, construction and services.

Last month, the PMIs covering UK manufacturing, construction and services, were a little disappointing, compared to recent months, but still pointed to reasonable growth. The Manufacturing PMI  fell from 54.6 in February to 54.2, the construction PMI fell to 52.2 from 52.5, but the Business Activity Index tracking services rose from 53.3 to 55.0 Together the three indexes are consistent with quarterly growth in UK GDP of 0.5%.

3 May, Federal Open Market Committee meeting, Two-day meeting (2 May – 3 May) – FED.

Will it or won’t it? Not so long ago, analysts were suggesting that  another hike in US interest rates would have been a forgone conclusion by now, but then US inflation recently fell, the former FED chair Ben Bernanke suggested that interest rates may be set to stay low permanently, will the FED announce an increase in US interest rates today? Whatever it does, it will make headlines.

5 May, US Employment report, April – Bureau of Labor statistics

Last month the US employment report was a little disappointing, with non-farm payrolls increasing by just 98,000, the smallest increase since May 2016. On the other hand, US unemployment fell to just 4.5%, and average hourly earnings rose by 2.7%, year on year.  Did April see more new jobs created?

Further announcements include

1 and 2 May

  • PMIs tracking manufacturing world-wide, from Markit, ISM (For the US), Caixin (China) and others

2 May

  • EU unemployment, March – Eurostat

3 May

  • Preliminary Flash Estimate EU and euro area GDP, Q1 2017 – Eurostat
  • PMIs tracking services worldwide, from Markit and ISM and others

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