Thursday Preview: Diageo, Rio Tinto, Smith & Nephew

10th Feb 2010 17:19

With the results from the major oil companies behind us, focus tomorrow will be on the producer of a different kind of 'black stuff', Guinness owner Diageo.Nomura is expecting the half-year report to be positive in tone, with the drinks brands giant, which also owns a wide range of spirits, guiding to low single digit percentage growth in earnings before interest and tax for fiscal 2010. Latin America, Asia, Africa and parts of Europe are expected to have performed well but the US, where the company has encountered destocking behaviour patterns, may be subdued.'Expect dividend to be increased by 5%, but with potential for higher increases in future. With a more aggressive approach to M&A [mergers & acquisitions], we do not expect the share buy-back, currently suspended, to be renewed,' Nomura predicts.Miner Rio Tinto last month hailed 'another very strong quarter for iron ore production, driven by continuing high demand from China' as it published its fourth quarter operations review.The strong production figures, which will be reflected in tomorrow's full-year results, prompted UBS to raise its estimates on the company. Deutsche Bank expects medical devices group Smith & Nephew to report a 9.1% increase in sales in its full-year results, helped by a recovery in the US and Europe.Aero-engineer Rolls-Royce is expected to point to the slowdown in civil aviation as it unveils its full-year figures.