Belfast Telegraph

From BP to banks . . . this is a crucial week for blue chips

The Week Ahead

By Toby Green

Back when it released its last update in October, BP said it had reached a turning point in the wake of the Gulf of Mexico tragedy. The oil giant's fourth-quarter statement today will show just how true this is.

Its annual strategy presentation will be held at the same time, and although legal proceedings over the spill are due to start in a matter of weeks, Credit Suisse believes the group will not discuss the trial or the chances of a settlement being reached with the US Department of Justice. Instead, the broker says BP will reiterate previous targets - such as its aim of achieving $38bn (£24.1bn) of asset sales - while also giving more details on its exploration plans.

Also today GlaxoSmithKline announces its full-year numbers, with the pharma giant's recent return to growth expected to have continued. Berenberg's analysts are forecasting sales to have risen to £7.85bn over the final quarter, up from the £7.1bn it managed during the previous three months.

Results/Updates: 888, Beazley, Bellway, BP, GlaxoSmithKline, Low & Bonar, St Modwen Properties, TalkTalk, Tui Travel, Victrex, Wolfson Microelectronics, Xstrata.

Wednesday

Thomas Cook faces another test tomorrow with the release of its first-quarter interim management statement at the same time as shareholders gather for its AGM. The troubled tour operator, which now trades on the small-cap index, has been hit by reports it suffered a sharp drop in bookings in January, so further details on trading in the wake of its financial difficulties will be vital.

Numis Securities' Wyn Ellis believes investors will also want to be reassured "progress is being made with debt reduction and that the banks remain supportive", with the analyst warning the outlook remains "highly uncertain".

Results/Updates: BHP Billiton, DMGT, Dunelm, Future, Grainger, Homeserve, International Power, Reckitt Benckiser, SuperGroup and Thomas Cook.

Thursday

BG becomes the latest of the major energy groups to update, with the gas giant unveiling fourth quarter figures. Deutsche Bank warns that its upstream operations have suffered a "disappointing year", predicting that - despite BG initially suggesting production could rise by as much as 6% - it will actually stay mainly flat.

Analysts from the broker also expect the debt on the company's balance sheet to have soared to roughly $11bn (£6.98bn) by the end of 2011, up from $7bn (£4.44bn) 12 months previously, as a result of a major increase in capital expenditure.

Results/Updates: BG Group, British Land, Catlin, Diageo, Enterprise Inns, Hargreaves Lansdown, McBride, Rank, Rio Tinto, Rolls-Royce, Shire, Tate & Lyle, Vodafone and WS Atkins.

Friday

With bankers' bonuses dominating the news over the past few weeks, the attention should switch to the sector's performance on Friday when Barclays becomes the first of the blue-chip names to reveal its 2011 results.

Poor recent numbers from US investment banks has created more than a few concerns over Barclays Capital, and Exane BNP Paribas believes the issues at the business will "dominate" the results.

Saying the last three months of the year will have been poor, the broker expects Barcap to post a pre-tax loss of £503m. The performance, says Exane, will raise questions over the group's strategy, and it warns that the market will need to hear positive comments about outlook if earnings downgrades are to be avoided.

Results/Updates: Barclays, Cable & Wireless Communications, Flybe, Shaftesbury and Zenergy Power.

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