Belfast Telegraph

Oil giants expect strong results despite slide in production

The week ahead

By Toby Green

The focus is on the giant oil companies this week as BG, BP and Royal Dutch Shell issue third-quarter results.

Given the spike over the last year in the price of the black gold, earnings comparisons are likely to be strong across the board, although crude has edged back in the last few months.

BP, which unveils its figures today, received a boost last week from the news its main partner in the Macondo well prospect, Anadarko Petroleum, will pay $4bn towards costs from the Gulf of Mexico disaster. With a massive court case regarding the tragedy due to start in February, Deutsche Bank's Lucas Herrmann believes that "news flow will now start to improve" in the run-up to the trial, as shown by the settlement.

BG Group's numbers are also out today, and - like BP - its production numbers are expected to disappoint.

There is perhaps the most optimism around Shell and its results on Thursday. Saying the update will "underscore (the) growth prospects" for the company, Collins Stewart's Gordon Gray points out that Shell's three major near-term growth projects are "just on stream or ramping up" and that, therefore, "the next few quarters represent the key period for delivery".

Today

A few City voices have started to question Arm Holdings recently, thanks partly to a number of its fellow chip companies cutting their forecasts.

However, as Royal Bank of Scotland notes, it is industrial and PC operations that seem to have been hit rather than mobile phones, which account for nearly two-thirds of Arm's shipments.

Wednesday

The pharmaceuticals giant GlaxoSmithKline is set to release third-quarter results and UBS believes this will be the quarter GlaxoSmithKline returns to growth "after headwinds ... diminish" from its declining pandemic anti-flu, Valtrex antiviral and Avandia diabetes drugs, all of which knocked its interims back in July.

Thursday

Deutsche Bank's Simon Champion believes recent "below average football results" will be partly to blame for William Hill reporting weak margins at its third-quarter results.

The analyst also highlights the fact the bookie is up against tough comparatives for the period.

Friday

Sir Martin Sorrell's advertising giant WPP releases third-quarter figures this Friday.

JP Morgan Cazenove expects that WPP will post organic revenue growth of just under 5%, which "would also indicate a fairly steep hurdle" for the rest of the year if the company still wants to hit its forecasts.

Popular