What to expect from companies announcing results week commencing 13 August.
Companies reporting w/c 13 August
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 13 August 2018.
Antofagasta (Q2 earnings release)
The copper miner, whose main operations are in Chile, updated the market on 25 July with regards to production, costs and guidance. Therefore, this announcement will involve audited results and is unlikely to have any major surprises or fresh news. Investors should appreciate that the group aims to have a more disciplined approach to costs which have been recently rising. Any comments regarding future global demand especially from China will also be worth noting.
We currently list Antofagasta as a HOLD
Lookers (Q2 earnings release)
Sales of new cars have dropped further this year after a poor performance in 2017. However, the most recent month’s figures show a slight improvement along with a rise in car production. Lookers has so far managed to outperform the market when it comes to new car sales so investors will be expecting that to have continued in the first six months of the year. The shares have outperformed over the last six months and the last update in May gave them a boost as it showed the used car and aftersales parts of the business continued to perform well in the first quarter. Given all the general economic uncertainty, any comments on the outlook for the year will also be of considerable interest.
We currently list Lookers as a BUY
Hikma Pharmaceuticals (Q2 earnings release)
The share price has been recovering strongly since results in March, which reported an increase in operating profit. The group is geared to the Middle East, North Africa and the US. A trading update in May stated that cost cutting efforts are on track and confirmed guidance for the year. Updates on its future drug pipeline will be important for investors.
We currently list Hikma Pharmaceuticals as a BUY
Kingfisher (Q2 sales and revenue release)
The market will be interested to see if the recent warm weather has encouraged customers at its B&Q chain to do more DIY activities and buy its products. It is certainly in need of some good news after a difficult year, both in the UK and France where sales have continued to struggle. The one bright part has been Screwfix where sales have been resilient, so investors will be watching to see if growth has continued there. The company’s transformation plan has caused some disruption in recent times and the market will be hoping for some signs that the benefits are coming through. Rival Homebase is also having a tough time, it was sold for £1 in May and any disruption there may benefit Kingfisher.
We currently list Kingfisher as a HOLD
Announcements for the w/c 13 August 2018:
Wednesday 15 Aug: UK Inflation figures – July: Office for National Statistics
The Consumer Price Index measure of inflation for June surprised the markets by coming in lower than expected at 2.4%. The rise in the oil price this year was forecast to boost the figures so it will be interesting to see if that is a factor this time round. The Bank of England’s decision to raise interest rates at the beginning of August was partly due to concerns about a tightening labour market with a record number of people in work so the wage growth figures due for release on 14 August will also be closely watched.
Wednesday 15 Aug: US Retail Sales – July: US Department of Commerce
Consumer spending makes up a large part of the US economy so it was no surprise to see that the strong retail sales figures last month were followed by second quarter GDP numbers showing the best growth for four years. Tax cuts have clearly left many Americans feeling slightly better off and able to splash out, although the Federal Reserve is expected to raise interest rates twice more before the end of the year.
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