Companies announcing results next week

Companies announcing results next week
Monday 

HSBC (Q3 results)

HSBC will be the last of the major banks to report Q3 numbers and judging by figures from its peers and its own Q2 figures, investors will be expecting the positive momentum to follow through. Rising interest rates should help net interest margins and the general upbeat tone around global and emerging markets should be reflected in its results. Investors will hope to see that management are taking steps to address organic growth and whether the group will become more adventurous in cross-selling more services to existing customers.

Tuesday

BP (Q3 results)

The latest rise in oil prices is unlikely to be reflected in BP’s Q3 results. Average Q3 prices were lower than during Q2 however, investors will expect that production rises, efficiencies and generally lower costs will feed through to higher sales and profitability in dollar terms. Production rises should come through from new project start-ups and investors will expect follow-up comments on some recent oil discoveries. There were improvements last time around in its downstream business too and we will expect to see this continue. The group is reaching the tail end of its asset disposal programme and signalled that capital investments will rise again in the near future. However, net debt levels may be the limiting factor here and we’ll wait to see if this has risen further. Investors, though should still expect good dividend levels and the latest rise in oil prices during October should give them more reassurance that its will be maintained.

WPP (Q3 trading update)

The market will be hoping for better news from WPP, the bellwether of the advertising industry widely regarded as a good barometer of the global economy. It has been a difficult year for the company, illustrated by poor second quarter results and a second cut to full-year sales growth forecasts at the interim stage in August. Expectations then were for between zero and 1% so any update on that will be watched closely. New media-related business has been WPP’s fastest growing area in recent times so that will also be a focus for the market. 

Other companies reporting today include: Croda International (interim management statement)

Wednesday

Next (Q3 trading update)

Interim results from the clothing retailer in September were well received by the market as the company said trading had been better and it slightly upgraded its full-year sales and profit guidance. While current trading in the high street stores will be of interest given some signs of weak consumer sentiment, the market will again be focusing mostly on the full year guidance, with profits previously forecast to be £687m-£747m. 

Other companies reporting today include: Standard Chartered (interim management statement)

Thursday

Wm Morrison (Q3 trading update)

While interim results in September were generally in line, some analysts saw a weakening trend in the second quarter data while others noted deterioration in profit margins. That led to a drop-off in the shares on the day and both will be under the spotlight again in this update. Competition concerns are not going to go away and the management initiatives will take time to execute.

BT (Q2 results)

It’s probably fair to say that it’s been a difficult year for the telecoms giant with the accounting scandal in Italy, lower growth in some international markets and concerns about the pension deficit to contend with. Interested investors will be aware that collectively, this has taken the shares down to their lowest level for four years. The market will therefore be focused on the strength of the consumer division, especially the uptake of TV services in which the company has invested so much.

Randgold Resources (Q3 results)

Higher gold prices and increasing production levels can only mean further rises in sales for the African based gold miner which has had a very successful number of years. Production has been rising following successful exploration and capital expenditure. Meanwhile, it has been disciplined on the cost front which has steadily fallen. Investors will expect this to remain below $700 an ounce and hope that costs could have fallen further. Investors will expect updates on the Kibali construction projects in the Congo which last time it reported as being on schedule.

RSA Insurance (Q3 trading update)

RSA has made great strides in turning itself around and the shares have responded accordingly. Interim results in August showed an 11% rise in premiums in the first half with operating profit up 15%. That came along with a slight improvement in the solvency II ratio. Weather events impacted the UK and overseas businesses early in the third quarter so investors will be interested to hear exactly how much effect that has had. The market will also be looking for any indications on how much dividends are likely to grow. 

Other companies reporting today include: Schroders (interim management statement) and Tate & Lyle (Q2 results)

Friday

Companies reporting today include: Smith & Nephew (Q3 trading update)


Economic Diary

Announcements for the w/c 30 October 2017:

1, 2 and 3 November, purchasing managers indexes tracking UK manufacturing, construction and services, October – Markit/CIPS.

In October, the PMI for manufacturing fell slightly from the month before, but at 55.9, stood at a respectable level. The construction PMI, dropped below the critical no change level of 50, to 48.1, while the Business Activity Index tracking services rose a tad to 53.6, but then a sub-index tracking new business growth fell to a 13-month low.  The PMIs are closely watched and give the timeliest indication of the strength of the economy – last month they seemed to say that manufacturing was growing nicely off the back of a weaker pound supporting exports, but other sectors were struggling.  All told, the PMIs pointed to 0.3% quarterly growth in Q3. Was October any better?

1 November, US: FOMC meeting, two-day meeting, October 31 – November 1 – FED. 

There is a good chance that the FED will elect to increase interest rates today, up from the 1%-1.25% range; it opted for back in June.  If it does do so, it will be the third hike this year. If it surprises markets and keeps rates on hold, then theoretically markets should react by buying, or may conclude that the FED knows something they don’t know, and sell. It will depend on the rationale applied to explain the move.

2 November, Inflation Report, November 2017, Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 1 November 2017 – Bank of England. 

Will the Bank of England increase interest rates today and for the first time since the depths of the recession.  There is a good chance it will, but whether rates remain at an all-time low of 0.25%, or are increased to what was an all-time low of 0.5% is neither here nor there. What matters is whether the Bank of England elects to increase rates on multiple occasions over the next year or so, and to get a feel on how likely that is, the Inflation Report may be more important.

2 November, US Employment Situation, October – Bureau of Labor Statistics. 

Usually, the Employment Report is closely observed, but if the FED does increase rates the day before, it may be less important than normal. Last month, non-farm payrolls declined but then the data was distorted by the effects of the hurricanes, especially Hurricane Harvey. Likewise, today’s data should see a big bounce back, but to get a better feel for the underlying trend, we may need to wait another month, when the Hurricane related affect is likely to less marked.

Other announcements

31 October

  • UK National Accounts, the Blue Book – Office for National Statistics
  • UK Balance of Payments, the Pink Book – Office for National Statistics
  • Flash Estimate Euro area inflation, October – Eurostat
  • Preliminary estimate of EU and Euro area GDP, Q3 – Eurostat
  • EU Unemployment, October – Eurostat
  • US Consumer Confidence Index, October – Conference Board

1 November

  • Purchasing managers indexes world-wide, tracking manufacturing – Markit, ISM, Caixin and others

3 November

  • Purchasing managers indexes world-wide, tracking non-manufacturing – Markit, ISM, Caixin and others

 

Please remember, no news or research item is a recommendation or advice to buy. Every Investor is not responsible for accuracy and may not share the author’s views. If you are unsure of the suitability of any investment for your circumstances please contact an adviser. All investments can fall as well as rise in value so you could get back less than you invest and tax policies may change. 

 

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