Some of the local earnings releases to take note of this week include:
Anheuser-Busch Inbev (3Q18 Results): Management expects to deliver strong revenue and EBITDA growth for FY18 – the performance during 1Q18 was slightly better than expected with growth expected to accelerate primarily in the second half of the year.
Allied Electronics (Interim Results): In a September trading statement, the group guided for normalised headline earnings per share to increase by between 52% and 57%, ahead of full year expectations (Bloomberg: +28%). HEPS from continuing operations will be 22% to 28% higher following the restructuring of numerous core business in the first half. Normalised revenue (41% to 45%) and EBITDA (14% to 18%) from continuing operations will also achieve robust growth.
Calgro M3 (Interim Results): The company expected HEPS to decline by 93% y/y to 3.11 cents for the first half. According to management, the period under review was one of the most difficult ever experienced due to various challenges including amongst others, macro and micro economic uncertainty as well as uncertainty pertaining to land expropriation. Despite these challenges, management stated that the company has worked tirelessly to ensure that the group has a healthy balance sheet, 10 projects in the ground at various phases to mitigate risks and expanded its Memorial Parks business.
Lonf4Life (Interim Results): Management guided for HEPS to increase by between 42% and 61% y/y. The comparative HEPS numbers comprised only of finance income on capital raised at listing (less corporate costs incurred during that six months period) given that the first acquisitions only became effective from 1 November 2017.
Clicks (JO:CLSJ) Group (Full Year Results): Management guided for full year earnings to increase between 12% and 17% with retail selling price inflation expected to average between 2% and 3%. This follows on from a solid first half result, with reported HEPS growth of 14.8%.
Within the resources sector, Anglo American (LON:AAL) Platinum, Kumba Iron Ore and Royal Bafokeng Platinum are expected to release quarterly production updates next week.
Lewis, South 32, Truworths International and Distell will host AGMs over the week, while Tsogo Sun (JO:TSHJ) and Hospitality Property Fund will host GMs.
Earnings season is expected to gain momentum next week with ~154 S&P 500 companies scheduled to release results. Tech heavyweights, Alphabet (NASDAQ:GOOGL) (Google) and Amazon.com (NASDAQ:AMZN), are likely to be in spotlight as both companies are scheduled to release quarterly numbers with Bloomberg estimates guiding for positive earnings growth from both counters. Amazon has recently been in the headlines following news that eBay has filed a lawsuit against the company, accusing the US retail giant of using illegal tactics to recruit sellers. eBay noted that Amazon representatives used eBay’s internal email system to contact sellers which is a violation of the marketplace’s policies. Additional tech releases to take note of include, Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC) and Twitter. Market participants will also keep a watchful eye on key releases out of a few additional sectors including food and beverage (McDonald’s (NYSE:MCD), Hershey and Chipotle Mexican Grill (NYSE:CMG)), financials (Visa (NYSE:V)) and consumer staples (Kimberly-Clark (NYSE:KMB) and ColgatePalmolive).
According to Factset, 6% of the companies in the S&P 500 have reported earnings thus far with 86% reporting earnings above the mean estimate and 68% having reported sales above the overall expected average. So far, for 3Q18, the blended earnings growth rate for the S&P 500 is 19.1% which will likely be the third highest earnings growth rate since 1Q11 (19.5%).
In Europe, the focus will be on the financial sector as Deutsche Bank (DE:DBKGn), Barclays (LON:BARC) and Royal Bank of Scotland (LON:RBS) prepare to release third quarter results. Bloomberg estimates guided for a 23% decline in earnings for Barclays, with revenue expected to fall by 1.6%. According to Deutche Bank research, UK margins remain a key discussion point given recent mortgage pricing reductions. The research house expects another quarter of low impairments as credit quality data from the BOE and unemployment data remains robust – despite the ongoing uncertainty from Brexit. Bloomberg Intelligence highlighted that Barclays has been successful in reducing some of the company specific headwinds experienced during the first half however uncertainty associated with Brexit remains a concern.
In the Asia-pacific region, investors are likely to shift their attention towards the insurance sector with results expected from China Life Insurance, China Pacific Insurance and New China Life Insurance. Bloomberg estimates are guiding for positive growth for the above companies. China Life Insurance recently generated a lot of news flow after signing an agreement with two real estate developers, China Resources Land and Shanghai Land, to jointly launch a city development fund worth 15 billion yuan ($2.17 billion). The eight-year fund will mainly invest in office buildings, hotels, commercial and long-term apartment projects and related services projects in Shanghai’s core locations.