Thursday preview: Shell, Unilever, Astra ...

27th Apr 2011 18:21

As is usually the case, hot on the heels of a trading update from oil titan BP comes a report from its Anglo-Dutch rival Royal Dutch Shell. Broker Charles Stanley says that after Shell's fourth quarter update failed to cut the mustard, the first quarter update "will be quite an important staging post to see how Shell is performing financially against its growth plans."Charles Stanley analyst Tony Shepard is going for a 20% increase in earnings to $5.8bn from $4.8bn in the first quarter of last year. "Upstream activities could produce earnings of $5bn compared to $4.3bn in 2010," Shepard suggests. "Production volumes may not show much improvement because last year was a strong comparative and there has been maintenance work in the North Sea and Nigeria together with restrained Gulf of Mexico output. However, in the first quarter of 2011, Brent oil prices have averaged $105/bbl compared to $76/bbl a year ago and this will have the largest impact on the bottom line. Gas pricing has been mixed with the average US Henry Hub price lower at $4.11/mmbtu (2010; $5.3/mmbtu) but UK gas prices have been much higher than a year ago. The UK average price has been about 56p/therm compared to 36p/therm a year ago," Shepard noted. Downstream activities are expected by Charles Stanley to have generated earnings of $1bn compared to $0.8bn a year ago. Another Anglo-Dutch leviathan, Unilever, is also due to report on Thursday. Matrix Group reckons market expectations for the household goods conglomerate are undemanding."Brisk organic growth rates of 8.5% and 6.4% reported in the same period by key European comparators Danone and Nestlé, respectively, suggest the company's polled consensus of 4.5% may be too low. Our contribution to that consensus poll was higher at 5.1% organic sales growth in the quarter," notes Matrix analyst Chris Wickham."Our greater optimism than the market for Unilever is based on stronger pricing expectations. We expect an in line with consensus 3.0% organic volume gain in the quarter, which itself would be lower than Danone's 5.0% volume expansion and Nestlé's 4.9%," Wickham added."However, the market looks for Unilever pricing to advance only by 1.5%. While this would be the same as Nestlé, it should be noted that Unilever's 2011 Q1 laps a quarter (2010 Q1) in which pricing fell by 3.3% compared with Nestlé which lapped a quarter when pricing advanced 1.7%. On pricing, there is clear scope for Unilever to outperform the analyst consensus," the broker reckons.RBS, meanwhile, forecasts underlying sales growth of 4.4% year on year, with "pricing moving positive to +1%, and volume growth moderating vs 2010 to 3.4%"."We expect the 1Q performance to be broadly consistent with the trends the group anticipates for the full year, though the late Easter and the recent geopolitical developments in markets like Japan and Cote D'Ivoire could take the edge off the 1Q trends," RBS believes.Anglo-Swedish drugs group AstraZeneca is tipped to declare first quarter earnings per share (EPS) of $2.10, but Nomura Securities thinks the company will top market expectations and announce EPS of around $2.18, with "the growth driven by lower tax-rate (reduced to 12.8% from 27.1%) on account of tax settlements despite ongoing genericisation of Arimidex and Toprol XL and anticipated currency headwinds of 1.5%."The Japanese broker thinks first quarter net sales will be $8,454m, versus market consensus of $8,420m. Astra's sector peer, Shire, is expected by Credit Suisse to have put in a strong first quarter performance on the back of its Aderall XR product, which should have seen a sharp increase in volumes shifted during the first three months of the year.Life assurance firm Standard Life issues an interim management statement covering the first quarter of 2011. Panmure Gordon is forecasting "life and pensions sales at £4,998m (+8%) PVNBP [present value of new business premiums] including the UK at £3577m (+7%) PVNBP." Market consensus for life and pension sales is £4,940m."We are expecting a continued recovery in sales following the positive comments made by the company concerning sales in Q1 2011 at the time of the prelims in March. The UK has a relatively tough comparative but we still believe that it will still show progress over Q1 2010," the broker adds.Panmure Gordon is not holding out much hope for a turbo boost to assets under management, which it thinks will have edged up 2.8% over the course of the quarter to £202.2bn.On the economic front, US gross domestic product figures for the first quarter are likely to have a major bearing on market sentiment. Market expectations are for an annualised gain of 1.8%, down from a gain of 3.1% in the previous quarter.INTERIM DIVIDEND PAYMENT DATEAir Partner, Henderson EuroTrust, Produce Investment, ThorntonsQUARTERLY PAYMENT DATEPremier Energy & Water TrustINTERNATIONAL ECONOMIC ANNOUNCEMENTSOverall Household Spending (JPN)Jobless rate (JPN)Consumer Prices (JPN)Industrial Production (JPN)Construction Orders (JPN)Bank of Japan target rate (JPN)GFK Consumer Confidence (GER) (07:00)Consumer Spending (FRA) (07:45)PMI Retail (GER) (08:55)Unemployment Rate (GER) (08:55)PMI Retail (EU) (09:00)Chicago Fed National Activity Index (13:30)Continuing Claims (US) (13:30)GDP (Advance) (US) (13:30)Initial Jobless Claims (US) (13:30)Pending Homes Sales (US) (15:00)Q3British Sky Broadcasting GroupGMSGroupe Eurotunnel SA (DI), Norseman Gold, Northern Foods, Telefonica 02 Czech Republic AS GDR (Reg S/144a)FINALSAsterand, Camellia, Harvey Nash Group, Orchid Developments Group Ltd., Randall & Quilter Investment Holdings, Vimetco GDR NV GDR (Reg S)ANNUAL REPORTDevro, Plaza Centers NVIMSSBritish American Tobacco, COLT Group SA, F&C Commercial Property Trust Ltd., F&C Inv Trust, Howden Joinery Group, Jardine Lloyd Thompson Group, Lloyds Banking Group, Standard LifeEGMSCOLT Group SA, Global Investment House KSCC GDR (Reg S), Ruffer Investment Company Ltd., UK Commercial Property TrustAGMS32Red, Acencia Debt Strategies Ltd., AstraZeneca, Baillie Gifford Shin Nippon, Berendsen, Brady, British American Tobacco, COLT Group SA, Croda International, Devro, EP Global Opportunities Trust, GGG Resources, Global Investment House KSCC GDR (Reg S), Groupe Eurotunnel SA (DI), HaloSource Inc. (Reg S), Hammerson, Henderson High Income Trust, Jardine Lloyd Thompson Group, Johnston Press, Mobile Doctors Group, Murray International Trust, Murray International Trust 'B' Shares, New World Resources NV (DI), OAO Novatek GDR (Reg S), Pearson, Premier Foods, RAB Capital, SEGRO, Senior, Talvivaara Mining Company, Telefonica 02 Czech Republic AS GDR (Reg S/144a)TRADING ANNOUNCEMENTSPlaytech Ltd.UK ECONOMIC ANNOUNCEMENTSGFK Consumer Confidence (00:01)FINAL DIVIDEND PAYMENT DATE32Red, Anglo American, Cenkos Securities, Filtrona PLC, Hotel Corp., Maintel Holdings, Maven Income and Growth VCT 5, Promethean World, Wynnstay GroupQ1AstraZeneca, Qatar Telecom QSC GDR (Reg S), Royal Dutch Shell 'A', Royal Dutch Shell 'B', Shire Plc, Talvivaara Mining Company, Unilever---jh