British American Tobacco
There’s a slew of high profile earnings statements out this morning, so we’ll kick off with British American Tobacco. Half year numbers from the company are certainly impressive, although they are flattered by the recent acquisition of Reynolds tobacco. Using like for like comparisons, volumes are down 2.2% on the same period a year ago, although this is better than the industry average. This is still a hugely profitable sector but the message that smoking is bad for you seems to be getting across. As such, the take away from these numbers could well be that further consolidation will be the key.
Royal Dutch Shell
The UK’s largest listed company, Royal Dutch Shell, has published a quarterly update this morning, and the numbers are breath-taking Obviously profitability here is dictated by the underlying price of oil, but income attributable to shareholders has leapt a phenomenal 290% from Q2 2017. Basic EPS is up a similar 279% and the company has also announced a share buyback of $25 billion over the next two years. That’s not far off 10% of the value of the company. Fossil fuels may be increasingly seen as a dirty word, but Shell’s shareholders clearly still have the ability to make money.
This isn’t the ‘sin stock special edition’ but Diageo has published full year results this morning. The numbers show universal progress with all the key metrics progressing well. Sales are up 0.9% to £12.2 billion and the operating profit has added 3.7%, too. Earnings per share are up 9% and investors are being rewarded with a 5% increase in the dividend.