Among others, the following local companies are set to report results this coming week:
- BIDJ (Interim Results): In a November update, management reported that trading for the first quarter was reasonably positive in the core food services business. Currency volatility continued to impact the company’s rand translated results, with a negative constant currency impact of approximately 2.0% against a basket of currencies in which the group trades.
- Imperial Holdings (Interim Results): In a first quarter trading update, management said that operating profit would be in-line with expectations and ahead of the prior period. Logistics reported a stronger performance than Motus, with SA and African operations delivering solid performances. Management said that they expect Logistics and Motus to grow revenues and operating profit by double digits. We will be focusing on any updates regarding the company’s Logistics/Automotive business separation.
- Adcock Ingram (Interim Results): In a recent trading statement, the company said that HEPS would increase by between 27% and 30% y/y, which was tracking ahead of consensus expectations (Bloomberg: +20.5%). The company had initially guided for HEPS growth of 27%.
- Woolworths (Interim Results): In a January trading update, management guided for diluted headline earnings per share to fall by between 7.5% and 12.5%, which was significantly behind market expectations. Group sales were up 2.5%, and was mostly supported by another good performance by Woolworths Foods, while Clothing, Country Road and David Jones slowed. Management also completed its review of David Jones’ carrying value and decided to take a non-cash impairment charge of AUD 712.5 million.
- Truworths (Interim Results): The company expects HEPS to decline by between 3% and 5% y/y, tracking behind expectations. Group sales increased 1%, and on an organic basis sales growth continued to show a modest recovery.
- Anglo American PLC (Full Year Results): In a recent production report for the year, the company reported that its iron ore production fell 2% at Kolomela and declined 19% at Minas Rio due to expected lower grade ore. Platinum production fell 4% y/y due to the decision to remove unprofitable ounces by placing Bokoni on care and maintenance. Copper and Nickel were marginally up, while coal production contracted due to an extended longwall move to Grosvenor in 4Q17.
- British American Tobacco (Full Year Results): In a December pre-close trading update, the company said that trading was in-line with expectations and that industry volumes are expected to fall by 4% with the company outperforming the industry. Leadership is confident of another year of good earnings growth in constant currency terms on the back of continued market share growth in Global Drive Brands, benefits from the phasing of volume shipments (offset by a more difficult pricing environment in some markets), and Reynolds American Inc .
- Sibanye Gold, AngloGold Ashanti, Amplats, Assore, African Oxygen, Northam Platinum, Glencore , Spur, Massmart, Group Five, African Rainbow Capital, Discovery and JSE will also report results next week.
- Coronation Fund Managers, Premier Fishing and Brands, Tiger Brands and Quantum Foods will host AGMs next week.
Earnings season in the US will continue to taper off next week however a few retailers are likely to generate some buzz at the beginning of the week. Automotive parts and accessories retailer Autozone, home improvement supplies retailer Home Depot and multinational retail corporation Walmart are scheduled to release quarterly results on Tuesday. Bloomberg is guiding for positive earnings growth from all three companies. Based on research from Macquarie, Walmart is expected to report industry leading figures for the fourth quarter with respect to comparable store sales and traffic. According to JP Morgan’s Q4 Earnings Season Tracker, 80% of S&P500 companies have reported EPS numbers ahead of estimates, surprising positively by an average of 5%. Looking at the overall market, fourth quarter EPS growth has come in at 14% y/y so far with 10 of the 11 sectors delivering positive growth thus far. Revenue is up 8% y/y so far with 77% of the counters beating sales estimates, the best reading in at least eight years.
In Europe, investors will shift their focus towards the financial sector with full year results due from HSBC Holdings and Royal Bank of Scotland . Bloomberg estimates are guiding for earnings growth of 16.9% from HSBC and a solid recovery of over 300% from Royal Bank of Scotland. Bloomberg Intelligence highlighted that the rehabilitation of Royal Bank of Scotland is almost complete with absolute costs expected to fall till 2020 – offering some support to operating metrics.
In the Asia-pacific region, tire company Yokohama Rubber will generate some news flow as the group prepares to release full year results on Monday. Bloomberg is guiding for bottom line growth of 74.2% and top-line growth of 10.8%. Deutsche Bank’s Pre-4Q report stated that whilst Yokohama is expected to deliver a decent result, there is slight downside risk to the fourth quarter print given weak shipments of replacement tires in Japan – these were largely concentrated in the third quarter due to expectations for upcoming price hikes. That being said, the group appears to be primed for growth going forward.
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