Companies announcing 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 31 July 2017.

Companies announcing results next week
Monday

HSBC (Q2 results)

The performance of the shares over the last 12-months has been impressive. This combined with an attractive dividend yield of 5% means that investors have been rewarded and will be hoping for further good news that will authenticate this rise. Updates on the important Asia operations will be worth noting, along with the progress on its strategic objectives and outlook for other regions.

Companies also reporting today: OPG Power Ventures (Q4 results)

Tuesday

Rolls Royce (Q2 results)

Investors in the company have been rewarded for their patience as the shares have recovered by increasing 90% since the lows last year and the new management’s restructuring takes shape. The Marine division is still likely to be affected by sector wide issues as its Aerospace division overcomes problems of its own making. However, the order book is still expected to be good as overseas customers take advantage of lower sterling and the company benefits from translation effects.

BP (Q2 results)

Management indicated that production levels for this year should improve compared to last year due to an increased production capacity. However, lower average oil prices during the second quarter will potentially be a drag on overall revenues compared to the first. Nonetheless, the substantial cost savings should feed through to better earnings performances. Investors will expect commentary on the company’s outlook for the oil sector and their response as to whether more money will once again go into expanding capacity. Restructuring of its portfolio is largely complete but there may be other assets that the firm is still in the process of offloading.

Companies also reporting today include: Direct Line Insurance (Q2 results), Taylor Wimpey (Q2 results), Intertek (Q2 results), Centrica (Q2 results)

Wednesday

William Hill (Q2 results)

In the last quarterly update in May, William Hill confirmed that it was seeing growth across all four of its divisions, including double-digit betting growth in the US & Australia as well as online. It also said it remained on track to deliver £40m of cost savings and cash generation was strong. However, the shares were hit in late June by news that the Australian government plans to ban credit betting. The market will be keen to hear what impact the company thinks that move may have on its fast-growing business down under.

Standard Chartered (Q2 results)

The share price hit a 12-month high last week helped by recent trading updates that increased hopes among analysts that the restructuring is starting to show through. This is an emerging market focussed bank and investors will be keen to read about the current economic situation especially in Asia. Any comments regarding the restating of a dividend will also be of interest, along with costs, bad loans and outlook.

Companies also reporting today include: BAE Systems (Q2 results), Rio Tinto (Q2 results), RSA Insurance Group (Q2 results)

Thursday

Next (Q2 trading statement)

The clothing retailer is having a tough year, as can be clearly seen in the share price, so investors will read this update with interest. Sales in the high street stores, which were weak in the first quarter, will be a focus. Directory sales were better but in May, the company lowered its forecasts for both full year sales and profits so the market will also be watching for any update on that. One bit of good news for investors is that the company has said previously that it does expect to pay four special dividends on a quarterly basis.

Randgold Resources (Q2 results)

This African-focussed gold miner has been reporting very good production numbers over the last few years helped by a good resource base and heavy investment into expanding productive capacity. Investors will expect higher average gold prices during the second quarter compared to the first and the improved production figure to lead to better revenues. There will also be some focus on whether the cost of production has improved on the already low levels. Investors will also expect news on further exploration results.

Companies also reporting today include: Inmarsat (Q2 results), Mondi (Q2 results), London Stock Exchange (Q2 results), Aviva (Q2 results), ConvaTec (Q2 results)

Friday

Merlin Entertainments (Q2 results)

In June the owner of Legoland and Madame Tussauds said demand in the UK had been dampened by the terrorist attacks in Manchester and London so investors will be looking to see if trading has recovered since then. Investors should note that the group has benefited from the weak pound with more overseas visitors at its attractions. Any update on progress with its move into China will also be of interest to the market.

Royal Bank of Scotland (Q2 results)

The share price has trended higher this year as investors start to see light at the end of what has been a very long tunnel. Investors will be hoping that the group remains on track with its forecast to return to profit next year. The group is set to shift its business towards retail and commercial banking, with the CEO’s restructuring plans to last until 2020. Areas to concentrate on will be costs and any further comments regarding regulatory fines.

Companies also reporting today: Pearson (Q2 results)

 Economic Diary

1, 2 and 3 August, Purchasing Managers Indexes (PMIs), July – Markit/Chartered Institute of Procurement

The first three days of August will see PMIs tracking UK manufacturing, construction and services. Last month, the three indexes were consistent with growth of around 0.4% in June, will they point to a pick-up in July?  Last month the manufacturing PMI fell to 54.3, a three month low, the PMI for construction fell to 54.8, after hitting a 17-month high in June and the business activity index tracking services fell to 53.4, the lowest reading since February.

3 August, Inflation Report, and meeting of the Monetary Policy Committee, (MPC) held on August 2 – Bank of England 

Since the last Inflation Report, the UK economy has deteriorated. The IMF forecasts growth of 1.7% this year, but both Q1 and Q2 saw growth running at a snail’s pace – 0.2% and 0.3% respectively.  Will the Bank of England downgrade its forecasts for the year ahead?  As for the MPC, it is not likely to vote for a hike in UK rates, but it will be interesting to see how many members do, and what the minutes say about the prospects of an increase in interest rates soon.

4 August, US Employment Situation, July – Bureau of Labor Statistics

June saw the fastest rate of job creation in the US since February, with non-farm payrolls rising by 222,000. Average hourly wages also rose – up by 0.2% month on month. Did July see further good news? If so, the odds of an increase in US interest rates later this year shorten.

Further announcements include:

31 July

EU Unemployment, June – Eurostat

Flash estimate EU inflation, July – Eurostat

1 August

PMIs tracking manufacturing in the euro area, US, China and across the world – Markit, Caixin (China) and ISM (US)

3 August

PMIs tracking services in the euro area, US, China – Markit, Caixin (China) and ISM (US)

 

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