What to expect from companies announcing results week commencing 11 June 2018
Companies reporting w/c 11 June
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 11 June 2018.
British American Tobacco (Q2 sales and revenue)
The shares have underperformed so far this year. In April the company said adverse currency exchange movements would have a negative impact on the business during 2018 with profit growth better in the second half of the year. The market will be keen to hear if that remains the case in this second quarter update. The performance of next generation products is also critical and any reaction to rather downbeat comments on that area from rival Philip Morris in recent weeks.
We currently list British American Tobacco as a HOLD
Iomart (Q4 earnings)
The market is expecting some strong numbers from this AIM listed cloud computing company as more government departments, businesses and individuals become comfortable with their data being held online. Group revenues are expected to rise by roughly 10%, and with the business being operationally geared, we should see much better reported profits. The growth is fuelled by new acquisitions and new contracts and investors will lookout for news on anything new in this space.
We currently list Iomart as a BUY
Tesco (Q1 sales and revenue)
The market will be hoping for further signs of improvement as a result of the revised strategy, regarding its medium-term ambitions. Tesco's CEO, Dave Lewis, has three key objectives in turning the company around; regaining competiveness in the core UK business, protecting and strengthening the balance sheet and rebuilding trust and transparency with the customer. Investors will also be expecting an update on the recent Booker acquisition.
We currently list Tesco as a HOLD
Economic Diary: week commencing 11 June 2018
11 June, UK industrial and manufacturing production for April
12 June,UK jobs data for April and May
The March unemployment rate held steady at the 42 year low of 4.2%, we could see the April figure drop further as job creation has continued. There should also be further good news for the consumer and we should expect another month where wage growth exceeded the rate of inflation.
12 June, US inflation rate for May
13 June, UK inflation data for May
April headed closer to the Bank of England’s target partly due to the pullback in airfares as a result of the timing of Easter and we would expect this to potentially drop further as the effects of a weak sterling since the EU referendum fade away. However, the recent spike in oil prices, which touched $80 a barrel, could have an upward impact.
13 June, US FOMC meeting and interest decision
The latest US yield curve suggests that we are unlikely to see a rate hike at this meeting with policy makers keeping rates at 1.75%, however, recent softer economic data isn’t enough to change the market’s view that we are still likely to see a few more rate hikes by the end of the year.
14 June, UK retail sales for May
April’s retail sales figures saw a boost from spending that was missed out during March’s severe weather conditions, which isn’t a good sign for the May figure. However, more seasonal weather conditions and a period where wages beat inflation could bring some cheer to retailers.
14 June, ECB meeting and interest rate decision
No changes in interest rates are expected from the ECB for a while yet but markets will focus on policy makers’ assessment of improving economic conditions in the Eurozone region and the prospect of withdrawing QE.
14 June, US retail sales for May
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