Thursday preview: Shell, Astra, Compass

27th Jul 2011 17:46

Investment analysts are going to need a plentiful supply of pencils and rubber erasers on Thursday for what is possibly the busiest day of the year so far for big company updates. Companies scheduled to update the market include AstraZeneca, BAE Systems, BT Group, Centrica, Croda International, Inchcape, Mondi, National Express Group, Rank Group, Reed Elsevier, Rolls-Royce Group, Royal Dutch Shell, RPS Group, Shire, Kazakhmys, Misys, Compass Group, Halma and Invensys.The biggest beast among those is integrated oil company Royal Dutch Shell, which is set to declare its second-quarter (Q2) results.Charles Stanley forecasts net income of $6.6bn, up from $4.2bn the year before. The smart money is on the dividend sticking at 42 cents, but Charles Stanley analyst Tina Cook said that with some of the group's major projects coming on stream and about to contribute to cash flow and earnings, Shell may flag an increase in its dividend."As with other international oil companies, a large part of the improvement in Q2 earnings will come from higher oil prices which are on average some 48% higher than a year ago. A feature of the Q2 reporting season will be disappointing production volumes across the European industry partly due to heavy maintenance schedules. Nonetheless, we expect Shell to show some positive volume growth in Q2 in contrast to other oil groups," Charles Stanley said."In the Downstream operations, cost savings may help to offset the pressure on refining margins and lower activity from planned maintenance and Q2 earnings could be about $1.3bn. Upstream earnings could show a 70% uplift to about $5.6bn compared to $3.3bn a year ago," Cook suggested. Anglo-Swedish drugs giant AstraZeneca is forecast by Nomura Securities to announce second-quarter earnings per share of $1.85, up from $1.79 in the corresponding quarter of 2010. The broker said the "ongoing genericisation [sic] of Arimidex in US and EU, and Nexium in EU [will be] offset by estimated foreign exchange tailwinds of 4.2%." Net sales are tipped by Nomura to be around 2.1% higher than a year earlier, at $8,352m. Matrix says the results are likely to show a slowdown in key brands, with top-line pressure building. "We are expecting revenues of $8.0bn (consensus is at $8.181bn), pre-tax profit of $2.93bn (consensus: $2.945bn) and EPS of $1.60 (consensus: $1.62), so we are slightly below consensus on our forecasts for Q2," the broker said."The main headwinds that Astra faces relate to the ongoing slowdown of Nexium in the US and Europe, a deceleration in Crestor, as evidenced by the recent prescription trends (ahead of the arrival of generic Lipitor) as well as the ongoing generic erosion of a number of key brands, which will accelerate into 2016," Matrix added.Credit Suisse has trimmed its earnings estimates for Compass ahead of the contract caterer's third quarter interim management statement. "We forecast Q3 organic growth of 3.7% which reflects a Japan driven slowdown (c1% impact in H2) and comps that are 300bps [basis points] tougher than in Q2. That said, we note Sodexo reported a slight acceleration in growth in Q3 (Mar-May) to 5.3% (adjusted for working days) from 5.0% in Q2 despite comps being 320bps tougher noting a greater contribution to organic growth from price as input costs rise," the Swiss bank said.INTERIMSAstraZeneca, BAE Systems, Centrica, Croda International, Dairy Farm International Holdings Ltd. (Singapore), Hongkong Land Holding Ltd. (Singapore), Inchcape, Jarvis Securities, Laird, Mandarin Oriental International (Singapore), Mondi, National Express Group, Promethean World, ProPhotonix (Reg S), Rank Group, Reed Elsevier, Rolls-Royce Group, Royal Dutch Shell 'A', Royal Dutch Shell 'B', RPS Group, Shire Plc, Telefonica SAINTERNATIONAL ECONOMIC ANNOUNCEMENTSRetail Sales (JPN)PMI Retail (GER) (08:55)Unemployment Rate (GER) (08:55)PMI Retail (EU) (09:00)Business Climate Indicator (EU) (10:00)Economic Sentiment Indicator (EU) (10:00)Continuing Claims (US) (13:30)Initial Jobless Claims (US) (13:30)Bloomberg Consumer Confidence (US) (14:45)Pending Homes Sales (US) (15:00)Q2AstraZeneca, Coca-Cola HBC S.A., Kazakhmys, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Shire PlcGMSSynchronicaFINALSMisysIMSSCompass Group, Halma, InvensysAGMSAcal, Caffyns, Connemara Mining Co, Dee Valley Group, Elektron, EPE Special Opportunities, F&C Global Smaller Companies, Framlington AIM VCT 2, Halma, Invensys, Kewill, Northumbrian Water Group, Opsec Security Group, Pennon Group, Phoenix IT Group, Record, RENN Universal Growth Investment Trust, RIT Capital Partners, VSA Capital Group, Workspace GroupUK ECONOMIC ANNOUNCEMENTSCBI Distributive Trades Surveys (11:00)FINAL DIVIDEND PAYMENT DATEBrulines Group, Caffyns, Helical Bar, Land Securities Group, MDM Engineering Group Ltd. (DI), Petropavlovsk, Printing.comQ1BT Group --jh