Barclays kicks off the banking results season on Thursday, but it will have plenty of competition for headline space from other heavyweights reporting on the same day, including pharmaceuticals giants Astra and Shire, plus Anglo-Dutch titans Royal Dutch Shell and Unilever.
The results statement from Barclays will be labyrinthine, as usual, but here is what some members of the stockbroking community are looking out for.
"At a group level we expect pre-tax profit of £1,829m compared to £1,655m for the same period last year, with group revenues of £7,646m flat on last year," said Credit Suisse.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Turning to Barclays Capital (BarCap), the investment banking arm of Barclays, Credit Suisse expects revenues to be down a mere 2% year-on-year at £3.2bn. "We think investors' focus should be on any management statement on April trading conditions and any outlook comment on how Q2 [the second quarter] and the remainder of the year are shaping up," the Swiss bank added.
Nomura said its forecasts are ahead on revenues but roughly in line with consensus on profit before tax. It tips profit before tax of £1,969m, versus a consensus figure of £2,006m. On the revenue side, the consensus forecast is for £7,959m, but Nomura is predicting £8,114m.
According to Nomura, the things to watch out for are: the quality of the bounce-back in BarCap revenues and its sustainability, cost flexibility and Basel 3 returns on equity (ROE) within those operations; indications of any longer-term plans for BarCap, including restructuring to get to a respectable Basel 3 ROE; performance of net interest income hedges after the gains booked in 2011 and resulting revenue impact; margin progression in UK retail and commercial banking; asset quality trends both in the UK and on the continent, plus colour around asset quality expectations, particularly in Portugal and Spain; impact from own-credit gain and Blackrock stake; increased risk weighted assets from low levels of fourth quarter 2011 from higher activity levels.
Moving on to the drugs giants, Credit Suisse is forecasting first quarter sales for AstraZeneca will be down 4% year-on-year on a constant currency basis.
"The full impact from patent expiries on Seroquel IR (EU & US), Crestor Canada, and Atacand Europe will not be felt until 2Q [second quarter]. However, we anticipate de-stocking ahead of these expiries to have hurt growth in 1Q. Company commentary also suggests emerging market growth will slow again in 1Q12. We forecast core EPS growth of -19%, heavily distorted by the extremely low effective tax rate in 1Q11 following a $500m tax provision release. On an underlying basis we forecast flat EPS [earnings per share] growth," the Swiss bank said.
Charles Stanley says investors will be keen to understand more about the structure of Astra's relationship with Amgen, where the two have agreed to jointly develop and take to market Amgen's clinical stage inflammation treatment portfolio. Someone needs to take ownership of the project, Charles Stanley suggests.
"The current agreement covers five monoclonal antibodies from Amgen's portfolio although presumably if this venture proves mutually beneficial the scope of the arrangement could be expanded. Hence, we believe that the market is viewing this
as having greater significance than just a stand-alone joint venture," Charles Stanley analyst James Dawson speculates.
Japanese broker Nomura is going for first quarter EPS of $1.80 and revenue of $7,914m, as Astra suffers from the impact of generic versions of its Arimidex and Nexium drugs in the EU, while the disposal of the AstraTech business will also hit revenues.
Market consensus is for revenue of $7,874m, profit before tax of $2,870m, and EPS of $1.78.
As for Shire, Credit Suisse thinks that "following the Lialda disappointment and lack of US approval for Replagal interest is likely to be focussed back on the US ADHD [attention deficit hyperactivity disorder] franchise where Shire is enjoying both volume growth, and limited discount pressures.
"Longer term the question remains as to how fast global enzyme demand will grow with unconstrained supply, and how much investment will be required to develop the European ADHD market," Credit Suisse said.
Charles Stanley makes the very pertinent point that Anglo-Dutch oil giant Royal Dutch Shell pays out about 12% of the total dividends paid by FTSE 100 companies, so there was a lot of grumbling when Shell said it would only be bumping up the quarterly dividend this year to 43 cents from 42 cents last year.
For the first quarter, Charles Stanley analyst Tony Shepard has pencilled in a figure for earnings after tax of $6.5bn, up from $6.3bn in the first quarter of 2011, with the improvement driven by the firm's upstream activities.
"Although Downstream earnings should show a good recovery, we do not expect the outcome to match last year's $1.7bn. Therefore, a lot will be resting on the performance of the Upstream activities. We expect production volumes to have grown by some 4% compared to last year and the average Brent oil price has been about $118/bbl compared to $105/bbl a year ago. In contrast, US gas prices have slumped to an average of $2.7mmbtu [millions of British thermal units] (2011; $4.1). Overall we expect Q1 Upstream earnings of $5.6bn ($4.6bn in Q1/11 and $5.1bn in Q4/11)," the broker predicted.
On the economic front, the Nationwide House Price index for April is expected to show a 0.5% increase after slipping 1.0% in February. That would put the index some 0.3% higher than a year earlier, versus an annual fall of 0.9% in February.
INTERIMS
Character Group, Namakwa Diamonds Ltd. (DI)
INTERIM DIVIDEND PAYMENT DATE
Produce Investment, Renewable Energy Generation Ltd.
QUARTERLY PAYMENT DATE
Land Securities Group
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
Economic Sentiment Indicator (10:00)
Initial Jobless Claims (US) (13:30)
Pending Homes Sales (US) (15:00)
Q3
Aquarius Platinum Ltd., Oil & Gas Development Company Ltd GDR (Reg S)
FINALS
Camellia, Hasgrove, Mail.ru Group GDR (Reg S), OSJC Center for Cargo Container Traffic Transcontainer GDR (Reg S), Vectura Group, Whitbread
IMSS
Barclays, British American Tobacco, Cobham, COLT Group SA, Go-Ahead Group, Howden Joinery Group, Meggitt, Taylor Wimpey
EGMS
Alpha Bank GDR (Reg S) USD, Open Joint Stock Company Inter Rao Ues GDR RegS
AGMS
Admiral Group, Advance Developing Markets Fund Ltd., Alpha Pyrenees Trust Ltd., AstraZeneca, Berendsen, Bouygues SA, British American Tobacco, Cobham, COLT Group SA, Croda International, Groupe Eurotunnel SA (DI), Jardine Lloyd Thompson Group, Jardine Lloyd Thompson Group, Meggitt, New Europe Property Investments, New World Resources A Shares, Powerflute Oyj (DI), SpaceandPeople, Talvivaara Mining Company, Taylor Wimpey, Tomco Energy, Torchmark Corp., Ubisense Group Plc, Wolfson Microelectronics
UK ECONOMIC ANNOUNCEMENTS
BBA Mortgage Lending Figures (09:30)
Business Climate Indicator (10:00)
FINAL DIVIDEND PAYMENT DATE
Anglo American, BlackRock World Mining Trust, Ladbrokes, Maintel Holdings
FINAL EX-DIVIDEND DATE
Powerflute Oyj (DI)
Q1
AstraZeneca, Royal Dutch Shell 'A', Royal Dutch Shell 'A', Royal Dutch Shell 'B', Shire Plc, Telekomunikacja Polska S.A GDR (Reg S), Unilever
