Looking Forward - week beginning 19/05/2014
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The earnings season continues this week, with a variety of notable companies set to take centre stage, with companies including Babcock having kicked things off today (19th May).
Marks & Spencer, Vodafone, Hewlett-Packard, Burberry, Mothercare and SABMiller are also set to feature this week.
Meanwhile, the spotlight will be on US-based retailers, as a series of retail companies - including Home Depot, Target, Best Buy and Gap - update the market next week.
UK engineering services group Babcock’s full year results – reported today (19th May) – showed a 9% increase in underlying revenue at around £3.5bn.
Underlying pre-tax profit came in at £316m, representing a 15% increase over the same period last year. Looking ahead, Babcock is confident the company will continue to make strong progress in the 2014/15 fiscal year.
Tomorrow will see Vodafone and Marks & Spencer among companies to update the market.
Regarding Vodafone, which has recently been involved in a series of deal making activities, expectations are that tough conditions in Europe are likely to have persisted. Focus is likely to be on any progress with its post-merger integration activities relating to the acquisition of German cable operator Kabel Deutschland and Spanish cable operator ONO.
Companies reporting on Wednesday include Burberry, Hewlett-Packard and Target.
Attention on Hewlett-Packard is likely to continue to be on any further progress CEO, Meg Whitman, has made in turning around the company – that includes details on how the company is attempting to decrease dependency on the declining PC industry. So, further details on its push into cloud-related services, together with recent talk of a potential entry into the 3D printing segment, will likely be in focus.
SABMiller and Best Buy are among companies reporting on Thursday.
SABMiller takes centre stage this week, with its 2014 preliminary results. If the company’s trading updates are anything to go by, expect some negative impact on its results due to adverse foreign currency movements, as well as emerging markets headwinds (notably in Africa).
Investors will also be on the lookout for details on the outcome of SABMiller’s strategic review of its 39.6% stake (worth around £1bn) in South Africa-based Tsogo Sun, operator of hotels and casinos.
On the earnings front, Friday is set to be a relatively quiet day.
On the economics news front, watch out on Tuesday for UK inflation data – expectations are that the previous figure of 1.6% is likely to have inched up slightly in April.
Wednesday will bring about UK retail sales figures, together with the release of the minutes from the Bank of England’s last monetary policy committee (MPC) meeting.
Thursday will see the release of the second estimates for UK GDP in the first quarter – expectations are that the figure is set to remain unchanged at 0.8%.