Corporate results expected next week
In a busy week for corporate results, the telecoms sector will hog the limelight. Figures from Vodafone, Cable & Wireless and Marconi are due - giving investors more clues about how the industry will cope with a global slowdown.
Troubled telecoms group Marconi’s half year results on Tuesday will give the City a chance to quiz the firm about its outlook for the months ahead.
However analysts think the firm - which has announced shock profit warnings and slashed thousands of jobs - is unlikely to be able to give meaningful predictions for the third quarter, let alone its full year.
Losses before one-off costs are forecast to add up to £348m against a £276m profit, fund manager Gerrard predicts, while analysts will also be keen for an update on the group’s plans to cut its debt mountain further.
Mobile phone giant Vodafone is forecast to post half-year pre-tax profits of £2.9bn when it reports on Tuesday, against £1.8bn the previous year.
The group last month reported a jump in subscriber numbers - to 95.6 million worldwide, 12.8 million of which are in the UK - and said it was on track to grow its customer base by 20% this year, so analysts are expecting few surprises there.
The interest will be in the group’s outlook statement, to see what the trends will be for the second half and what the impact of the economic slowdown will be on its business.
Telecoms group Cable & Wireless warned in September that trading was difficult and that it was expecting a 5% dip in revenue from its key Global division serving business customers.
The group, which announced plans to cut 4,000 jobs in March, will therefore be scrutinised when it reports half-year results on Wednesday for an update on trading and forecasts for the future.
Half-year figures will be difficult to compare as the firm has made some significant structural changes, including selling and buying businesses, however earnings before interest and depreciation are forecast at £450m, Gerrard said. Investec are pencilling in underlying profits of £18m.
Consumer products group Reckitt Benckiser will demonstrate the defensive qualities of its business on Wednesday as pre-tax profits in the third quarter are expected to rise to £94m from £83m a year earlier.
Sales of dishwashing, air care and surface care products should be robust, while the weakness of oil prices and lower advertising rates are likely to have driven down costs.
One of the major concerns for Reckitt Benckiser will be performance of the company’s developing markets, with efforts to turn around the Latin American businesses hit by country specific problems.
International Power, the generating company demerged from National Power, has only been in existence since October 2000 so comparisons for the third quarter will not be possible on Thursday.
However, fund manager Gerrard expects pre-tax profits for the three month period to be £60m after management said in September that it was on course to meet its targets for the full-year.
News on International Power’s construction and development pipelines will be important as they represent a significant slice of the group’s future earnings.
Thursday will see Invensys chief executive Rick Haythornthwaite unveil the engineering firm’s interim figures after little more than a month in the job.
It is unlikely to be an easy ride. Invensys is forecast to post pre-tax profits of £180m - a massive slide on last year’s £368m - after being hit hard by the US slowdown.
The City will be keen to hear, in lieu of any clear long-term outlook, how cost-cutting measures are working out. It will also give Mr Haythornthwaite an opportunity to outline his vision for the company.
