Companies reporting w/c 28 January

What to expect from companies announcing results week commencing 28 January 2019.

The Share Centre gives its thoughts on what to expect from companies announcing results week commencing 28 January 2019.

Monday

Porvair (Q4 2018 Sales and Revenue Release)

Small Norfolk based group involved in specialist filtration systems. The trading update in December stated that earnings were ahead of management expectations. So the market will focus on the outlook for the year ahead and its order book. Other areas to note will be how new production facilities are faring, along with new products and recent acquisitions. The performance of its North America operations is a key with over 50% of group revenue; demand for iron foundry and super-alloy filtration in the region has been strong.

We currently list Porvair as a BUY

Tuesday

Companies reporting this day include Hargreaves Lansdowne (Q2 2019 Earnings Release) - HOLD

Thursday

BT Group (Q3 2019 Sales and Revenue Release)

Shares in BT have outperformed the market over the past six months with a number of rumours swirling around about full takeover bids or possible offers for parts of the group. Must be stressed that all of these remain speculation at present. Interim results in November beat expectations with another good performance from the consumer division and some signs that the restructuring is proving successful. In this third quarter update investors will be looking to see if the company still expects full year operating profits of around £7.4bn.

We currently list BT as a HOLD

3i Group (Q3 2019 Sales and Revenue Release)

The portfolio is described as being resilient to the wider implications of Brexit, as it has limited UK exposure. Investors will focus on news about its largest holding, Dutch based Action, a discount retailer, along with the effects of weaker markets over the second half of last year on valuations The group has been cautious on its overall economic outlook and further comments regarding 2019 will be of interest.

We currently do not have a view on this stock

PPHE Hotel Group (Trading update)

Shares in this small boutique hotel group have enjoyed a stellar performance over the past year as the company moved to a premium listing on the main market and took full control of its Croatian business. In the previous update in October the company said it expected full-year results to be in line with expectations so there should be few unpleasant surprises in this trading statement which covers the 12 months to December. Investors will be looking to see if the London locations are still performing well and whether there are any further renovations planned at major hotels.

We currently list PPHE as a BUY

SSE (Trading update)

2018 proved to be a difficult year for the group, culminating in the failure to merge its retail business with Innogy and the rebasing of the dividend for 2020. Any further updates on the group’s future plans and regulatory issues will be worth noting. The recent cold weather is likely to have come too late to have boosted demand.

We currently list SSE as a HOLD

Unilever (Q4 2018 Earnings Release)

It’s been an interesting year for Unilever with the aborted plan to change the legal structure and Paul Polman stepping down as CEO. The third quarter figures in October showed some recovery in sales and in December the company made a big move into the Asian market with the purchase of Glaxo’s health food drinks business. Investors will expect to see underlying sales growth of 3-5%, as previously promised by the company, and any comments on strategy from the new CEO Alan Jope will also be of interest.

We currently list Unilever as a BUY

Diageo (Q2 2019 Earnings Release)

As with Unilever the company is seen as having some defensive qualities, which has made it attractive to investors in uncertain times and led to the shares outperforming the market over the past year. In these interim results investors will be interested to see if the company hits its target of mid-single digit organic net sales growth and their will also be a focus on the performance in Asia, especially China, given the slowdown in the economy there. Any comments on India, which is as important as any market for the company, will also be of interest given that the company has taken full control of United Spirits. A solid performance will be expected in the key North American markets.

We currently list Diageo as a BUY

Royal Dutch Shell (Q3 2018 Earnings Release)

The oil major has been reporting great numbers as average oil prices made steady progress since the lows of 2016. However, given the anticipation of higher supplies from shale and Iranian oil supplies not expecting to fall back as dramatically as previously expected, oil prices during the final quarter wobbled which will no doubt hit Shell's numbers. Investors though will still expect solid free cash flows and hope that gearing level shave down a little further. For 2018 as a whole revenues and profits should easily breach previous highs set back in 2013 especially since costs have been cut back dramatically.

We currently list Royal Dutch Shell as a BUY

Friday

Companies reporting this day include Glencore (Q4 2018 Sales and Revenue Release) – HOLD

Economic Diary

30 Jan 2019, US GDP
Q3's growth rate moderated to 3.4% from the second quarter's astonishing 4.2%. The final quarter of 2018 could see the US growth rate further moderate to 3%, still far better than any of their developed economy peers. If growth did indeed moderate, then it would somewhat justify the market's wobble in the final quarter of last year.

30 Jan 2019, US FOMC Meeting
Following the series of rate rises last year with the final one just in December, it is highly likely that FOMC policy makers will stay out for the time being given the anticipation of a further moderation in the US economy. They previously signalled that 2019 could see two rate rises, but the markets think it will not be as aggressive given the potential trade wars and the potential impact of the US government shutdown.

1 Feb 2019, US Jobs data, hourly earnings
Despite the recent worries of US economic growth, it is still anticipated that the US jobs market remained robust with the unemployment rate ticking slightly lower to 3.8% with the expectation of roughly 300,000 jobs created in the first month of the New Year. The month on month hourly earnings rate may have come down a little though but investor and media attention may try and focus on the impact on the jobs market of the prolonged government shutdown.

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