The market will be distracted on Wednesday from the teething pains of the creation of a new mining giant (Glencore Xstrata International) by the results from a mining conglomerate created in a merger from a different era, BHP Billiton.
The broking community thinks the figures covering the second half of 2011 will see BHP Billiton announce earnings before interest and tax (EBIT) of $15.5bn and net profit after tax of $10bn. Income investors can look forward to an interim dividend of 56 cents per share, if the market is on the money with its predictions.
Credit Suisse's key EBIT forecasts on a divisional basis are: Iron Ore $7.5bn; Petroleum $3.1bn; Base Metals $2.2bn; Metallurgical Coal $1.7bn.
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"We expect investors and analysts to focus on the impact of lower US natural gas prices on the US Onshore petroleum division and the likelihood of an impairment charge. While we do not expect a write down in the 1H12 [first half 2012] results given the US natural price gas price average $4.10/MMBtu [millions of British thermal units] in 2011, we cannot rule out a write-down at the FY12 [full year] results," the Swiss bank said.
"Investors are also likely to focus on the continuing expansion of BHP's WAIO operations given last week's approval for US$799mn in pre-commitment spending for Outer Harbour works. BHP has also been active in asset divestments with its flagged sale of the Diamonds (EKATI) business and 37% stake in Richards Bay Minerals (TiO2 feed-stocks)," Credit Suisse added.
Some pundits are looking for BHP to announce a share buyback programme, but Credit Suisse regard this as unlikely given the miner's capital expenditure commitments and its recent acquisitions.
Cillit Bang maker Reckitt Benckiser issues fourth quarter and full year results. Market consensus is for full year profit before tax of £2.4bn on sales of £9.5bn.
As for the fourth quarter, Nomura Securities reckons sales growth might surprise to the upside thanks to a strong performance from Durex condom maker SSL, which it acquired back in 2010.
The group has indicated that we can expect 4% like-for-like (LFL) year-on-year sales growth in the fourth quarter, but as Credit Suisse points out, this includes the pharmaceuticals business. For what Credit Suisse calls the "base business" it is going for LFL sales growth of 3%, both for the fourth quarter and the year as a whole.
"At the time of Q3 [third quarter] this guidance was caveated [sic] on a 'normal cough/cold season' which wasn't very good, but elsewhere things look like they were a little better to us to offset this," Credit Suisse suggests.
Credit Suisse reckons that the Chief Executive officer's strategic overview will be more keenly anticipated than most of the numbers.
"There is a body of opinion that Reckitt will 're-base' their margins, which we firmly believe won't be the case. The group has lost some share in some areas but 16 of the 19 Power brands have gained share globally. Higher marketing wouldn't lead to higher sales in the current climate. The group's margins are no higher than peers, while its media spend is amongst the highest," Credit Suisse notes.
The Swiss bank thinks the strategic overview will focus more on concentrating on what has worked well over the last 10 years: "innovation-led sales growth".
"Some disposals may be flagged as the portfolio is tidied up at the fringes, but nothing dramatic. With debt coming down sharply and given the low valuation, the group may feel the time is right to restore the share buy-back programme - that would be a welcome development," Credit Suisse reckons.
Panmure Gordon is expecting good things from out-of-town home-wares retailer Dunelm when it issues its interim results. The company has already flagged that it expects half year pre-tax profits to be around £52m, so there should not be too many surprises on the numbers side.
"Thanks to competitor weakness, cash rich Dunelm may be able to surprise on the upside in terms of space growth, and possibly in the short and medium term," Panmure Gordon postulates.
Dunelm currently has 113 superstores and will likely have 116 by the end of June, Panmure Gordon believes. "We currently forecast that the company will open 10-12 stores per year until FY2016 [fiscal 2016], taking the count to 162. However, as the ability to compete for high quality big box space lessens in the sector, this looks rather conservative. We think that Dunelm could easily succeed in opening up more space more quickly and that news of this kind will drive the shares," the broker said.
INTERIMS
BHP Billiton, Dunelm Group, Stagecoach Theatre Arts
INTERIM DIVIDEND PAYMENT DATE
Ashtead Group, Halma
INTERIM EX-DIVIDEND DATE
City of London Investment Group, Cohort, Core VCT 'B' Shares, CPL Resources, Foresight 3 VCT, Foresight 4 VCT, Ingenious Entertainment VCT 1, Ingenious Entertainment VCT 1 'C' Shares, Ingenious Entertainment VCT 1 'D' Shares, Ingenious Entertainment VCT 2, Ingenious Entertainment VCT 2 'C' Shares, Ingenious Entertainment VCT 2 'D' Shares, Ingenious Live VCT 1, Ingenious Live VCT 2, Mattioli Woods, Murgitroyd Group, Stagecoach Group
QUARTERLY EX-DIVIDEND DATE
IBM Corp., JPMorgan Claverhouse Inv Trust, Picton Property Income Ltd, Polar Capital Global Healthcare Growth & Income Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (GER) (07:00)
Crude Oil Inventories (US) (15:30)
Current Account (GER) (07:00)
Factory Orders (GER) (11:00)
MBA Mortgage Applications (US) (12:00)
Retail Price Index (GER) (07:00)
Q4
Smurfit Kappa Group, Virgin Media Inc.
GMS
Environ Group (Investments) , Sunkar Resources
FINALS
International Power, New Europe Property Investments, Reckitt Benckiser Group, Smurfit Kappa Group, Virgin Media Inc.
IMSS
Daily Mail and General Trust, Grainger, Supergroup, Thomas Cook Group
EGMS
Thames River Multi Hedge PCC Ltd. Realisation Shares
AGMS
Daily Mail and General Trust, Future, Grainger, Thomas Cook Group
UK ECONOMIC ANNOUNCEMENTS
BRC Shop Price Index (00:01)
FINAL DIVIDEND PAYMENT DATE
Edinburgh Worldwide Inv Trust
FINAL EX-DIVIDEND DATE
Avon Rubber, Henderson Opportunities Trust, Manroy, Sage Group, Victrex, Zytronic
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