What to expect from companies announcing results week commencing 22 October 2018.
Companies reporting w/c 22 October
Graham Spooner, Investment Research Analyst at The Share Centre, gives his thoughts on what to expect from companies announcing results week commencing 22 October 2018.
Whitbread (Q2 2019 Earnings Release)
These interim results have rather been overshadowed by the news in August of the sale of the Costa coffee business for £3.9bn in cash to Coca Cola. That deal was approved by shareholders at a recent meeting and they will now be looking for more details about how the company plans to return the bulk of the proceeds to investors. Some of the money is earmarked for expansion of Premier Inn and the market will be interested to hear any further details of that as well as any news on recent trading. A slightly weak like-for-like sales figure at the last update in June caused a ripple of surprise among some analysts.
We currently list Whitbread as a HOLD
Other companies reporting this day include: Anglo American (Q3 2018 Sales and Revenue Release) – HOLD, St. James’s Place (Q3 2018 Sales and Revenue Release) - BUY
Barclays (Q3 2018 Earnings Release)
Long suffering investors have seen the share price struggle again year to date, falling to a two-year low in October. Questions continue to be raised over the group's strategy, especially with regard to investment banking. A generally quiet period for markets may have impacted on its trading operations. Investors will be keen to hear about the group’s future outlook and how the restructuring is panning out.
We currently list Barclays as a HOLD
Other companies reporting this day include: Antofagasta (Q3 2018 Sales and Revenue Release) – HOLD
Lloyds Banking Group (Q3 2018 Sales and Revenue Release - Interim)
With the share price trading at close to a two-year low, investors will be hoping that the group’s outlook and update can help restore some much needed confidence. The results in August came with yet more provisions for PPI claims, but did report that net interest margin, lending quality and capital ratios were better than previous guidance. Brexit appears to be hanging over this UK-focussed bank, along with less confidence in the economic outlook and a slowing housing market.
We currently list Lloyds as a HOLD
WPP (Q3 2018 Earnings Release)
So far this has been another year investors in the company will want to forget, with the latest negative news being the loss of a contract with Fords. WPP was once thought of as the bellwether of the advertising industry and as such was widely regarded as a global economic barometer, but these are changing times for the group. The market has been factoring in continuing pressures on advertising and profit margins. Other areas to concentrate on will be the performance of its important North American operations and any news on the new CEO’s restructuring plans, which are due before the years end.
We currently list WPP as a HOLD
Other companies reporting this day include: RELX (Q3 2018 Sales and Revenue Release) – BUY
International Consolidated Airlines Group (Q3 2018 Earnings Release)
In common with its main rivals, shares in the owner of the BA and Iberia airlines have underperformed over the past month as investors have become concerned about the possibility of rising fuel prices, higher capacity levels reducing profits and uncertainty created by the Brexit negotiations. The latter relates principally to concerns around whether IAG will meet the EU's ownership rules in the case of a "No deal" scenario. The market will be looking for reassurance on that in this update from the company, along with guidance on where full-year operating profits are likely to come. One of the bright spots for IAG in recent times has been the new low cost airline LEVEL and it will be interesting to see how that is performing.
We currently list International Consolidated Airlines as a BUY
Royal Bank of Scotland Group (Q3 2018 Earnings Release)
Shares in banks have once again come under pressure year to date. The CEO’s restructuring plans will shrink the group further through to 2020, shifting its business focus towards commercial and retail banking. 2018 saw the bank pay its first dividend since the financial crisis and long suffering investors will be hoping that the trading update will not derail hopes of more. Other areas to concentrate on will be costs and any further delays to the restructuring timetable.
We currently list RBS as a HOLD
Announcements for the w/c 22 October 2018:
26 October 2018, US GDP (First Preliminary)
While the year-on-year growth rate could hit 3% - the highest since 2015 - giving the US president much to brag about, the quarter-on-quarter figure is expected to drop back to 3.2% from the 4.2% which was artificially inflated to for the purchasing of US agricultural products before tariffs could be implemented on them. Nonetheless it will still be a growth rate that will be the envy of other developed economies.
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