What to expect from companies announcing results week commencing 23 July.
Companies reporting w/c 23 July
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 23 July 2018.
Marston’s (Q3 sales and revenue release)
Shares in the pubs and brewing group have had a tough year so far in 2018 with investors worried about the level of consumer spending and the prospect of rising interest rates squeezing disposable incomes. In this third quarter update, the market will be watching to see if the World Cup and warm weather have boosted sales. Investors will be focused on how the Destination and Premium pubs, which include Generous George and Pitcher & Piano, are performing. Like-for-like sales dropped in the first half but the company previously said it expected the performance to improve in the second half. Sales at the drinks-led taverns and the accommodation lodges will also be of interest.
We currently list Marston’s as a BUY
Vodafone Group (Q1 sales and revenue release)
Full year results were pleasant for investors but the announcement of a change at the top caused jitters which reflected into the share price which is now trading at the lower end of its recent range. Investors will seek reassurances from the Q1 figures, hoping that data demand continues to be the driving force for service revenues. Emerging markets should still be fast growing and investors will look at key European markets for evidence of a sustained turnaround. Progress reports will be expected for the Indian merger and the recent acquisition of assets in Europe with updates on cost synergy expectations.
We currently list Vodafone as a BUY
Other companies reporting this day include: Croda International (Q2 earnings release) – BUY, Informa (Q2 earnings release) – BUY, ITV (Q2 earnings release) – HOLD, Tullow Oil (Q2 earnings release) – BUY, GlaxoSmithKline (Q2 earnings release) - BUY
AstraZeneca (Q2 earnings release)
As sales of Crestor and other ex-patent blockbuster drugs continue to plunge, investors will be looking for signs that newer drugs are more than making up those falls. And investors have recently been more buoyed by news of more regulatory approvals from their R&D portfolio. Investors will be looking to guidance for the year and whether they keep their expectations for low-single digit growth in sales, if so then we could see this as being the year of a turnaround in sales.
We currently list AstraZeneca as a BUY
Diageo (Q4 earnings release)
The drinks giant has enjoyed a strong run in its shares since March, reaching a record high recently. This is partly due to the weakness in Sterling in the period but also due to growing confidence that the company will see a steady increase in sales and profits in the coming years. The performance of its large business in the US will be a focus, although investors will be more interested in how sales in key Asian growth markets are trending.
We currently list Diageo as a BUY
Other companies reporting this day include: British American Tobacco (Q2 earnings release) – HOLD, Anglo American (Q2 earnings release) – HOLD, Compass Group – (Q2 sales and revenue release) – BUY, EVRAZ (Q2 sales and revenue release) – HOLD, RELX (Q2 earnings release) – BUY, Schroders (Q2 earnings release) – HOLD, The Sage Group (Q3 sales and revenue release) – HOLD, Segro (Q3 earnings release) – HOLD, Sky (Q4 earnings release) – HOLD, Smith & Nephew (Q2 earnings release) - BUY
BT Group (Q1 sales and revenue release)
Given the 20% fall in the share price so far this year investors will be hoping for some good news from the telecoms giant. The consumer division should continue to show growth but the full-year guidance provided at the time of the fourth quarter update in May was rather uninspiring so any change to that will be of interest. In June the company announced that CEO Gavin Patterson will be stepping down later in the year so any news on his successor will also be noteworthy.
We currently list BT as a HOLD
Reckitt Benckiser (Q2 earnings release)
After a fairly disappointing set of full year results and further disappointments in the April update, investor’s expectations for the half year numbers have been dampened, but the hope is that management will not reduce their guidance for the full year’s revenues of between 2-3%. However, currency tailwinds turning into headwinds will make this task more difficult. Investors will expect a progress report on the preparations to split the group into two separate divisions, Health and Hygiene and an update on the integration of the Mead Johnson acquisition.
We currently list Reckitt Benckiser as HOLD
Other companies reporting this day include: Antofagasta (Q2 sales and revenue release) – HOLD, Pearson (Q2 earnings release) - HOLD
Announcements for the w/c 23 July 2018:
26 July: UK Q2 GDP (Preliminary)
The Q1 GDP figures were very much a disappointment with many blaming the poor weather as the key culprit. However, there were others who felt that the weakness was much more fundamental in nature and a cause for concern. However, as we progressed through the second quarter, we have seen individual economic releases looking a little more upbeat. And the good weather during June as well as the England football team’s prolonged stay in Russia should provide a boost to the battered retail sector. Indeed, the first publication of monthly GDP stats last month suggest that the second quarter should see a productivity uptick, consensus estimates are rises of 0.3% and 1.4% for quarter-on-quarter and year-on-year figures respectively.
27 July: US Q2 GDP (Preliminary)
The Q1 GDP figures surprised the market to the downside growing by just 2% year-on-year, the lowest in a year. But economic data published since then suggest that we should see a modest bounce back in activity during the second quarter as employment levels and the rate of inflation steadily trend higher. The consensus estimate is that the economy grew by 2.9% over the year, if so then there will be little to suggest why the Fed should not continue on its interest rate trajectory where they last indicated that there will be at least another two rises by year end.
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