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Companies Reporting: BAE Systems, Walt Disney, Direct Line


Our regular look at the FTSE 350 and a selection of other companies reporting from 6 – 10 May.

  • There’s been a distinct lack of sparkle at Disney
  • Can Direct Line move on from takeover talk and start driving positive performance?
  • Shopify sets sights on another strong quarter
  • BAE Systems hoping to stay on the Ball and deliver full-year guidance

Walt Disney, Q2 Results, Tuesday 7 May

Susannah Streeter, head of money and markets, Hargreaves Lansdown “There’s been a distinct lack of sparkle at Disney NYSE:DIS and investors will be keen to see the magic return.

There is a lot now riding on its streaming business but, even though sales rose 15% in the first quarter, this doesn’t yet make up a big enough piece of the pie to offset the decline in revenue linked to its traditional networks. It is super important that the company can get more eyes on screens, rather than relying on price hikes for growth.

Disney is shapeshifting, but enticing new viewers with its streaming content is an expensive business, in a highly competitive landscape. Disney’s parks remain highly popular, and a way to make the most of its immense back catalogue of favourite characters. The foray though into gaming, with the $1.5 billion equity stake in Epic Games, arguably offers more exciting revenue streams going forward, but investors will want to see more detail about how Disney’s hits can be integrated into this strategy.”

Direct Line Group, Q1 Trading Statement, Wednesday 8 May

Matt Britzman, equity analyst, Hargreaves Lansdown “Direct Line’s story has been dominated by takeover talk in recent weeks. But a fairytale ending looks out of reach after Ageas confirmed a few weeks ago that it would not be making a firm offer. Direct Line LON:DLG had previously rejected a couple of proposed deals and Ageas couldn’t make the numbers work to put a more enticing number on the table.

And so, we get back to business. Full-year results painted a better picture than we’ve had for some time. But there’s a long way to go before this turnaround is complete. It’s no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market. All eyes will be on whether profitable new business has continued over the first quarter, and when we can expect to see that translate into improved results.”

Shopify, Q1 Results, Wednesday 8 May

Guy Lawson-Johns, equity analyst, Hargreaves Lansdown “The Canadian giant, Shopify NYSE:SHOP, is a leading provider of essential internet infrastructure for commerce. While the platform is all but invisible to consumers, it helps provide millions of vendors globally with a customisable online shop with minimal expertise. Shopify powers 10% of all online shopping in the US, fuelling full-year revenue growth of 26% last year, up to $7.1bn.

Momentum is set to continue into the new financial year, with revenue expected to grow at a low-twenties percentage rate in the first quarter. Having increased prices, lowered costs and removed the financial burden of its unsuccessful logistics company, Shopify’s gross margins look set to improve by 1.5 percentage points since year-end. As well as looking under the hood at performance this quarter, analysts will be eager to hear how the outlook for the rest of the year is shaping up.”

BAE Systems, AGM Trading Statement, Thursday 9 May

Aarin Chiekrie, equity analyst, Hargreaves Lansdown “BAE Systems LON:BA. has moved from strength to strength in recent years. The group manufactures military equipment like fighter jets, submarines and ammunition, and recent global events have increased demand for BAE’s products. That helped full-year sales and underlying operating profits both grow 9% last year, to £25.3bn and £2.7bn respectively.

That growth’s set to reach double-digit rates this year, including a helping hand from the recent acquisition of US-based Ball Aerospace. With an order backlog of £69.8bn back at year-end providing good revenue visibility, there’s little reason that these targets can’t be met. The main thing that might rock the boat is if there’s been any major hiccups with the integration of Ball Aerospace. There will be a sharp focus on this in next week’s trading update, as investors hope to gain some insight into whether everything’s moving along as planned.”

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report

No FTSE 350 Reporters
BP Q1 Results
IWG Q1 Trading Statement
Walt Disney Q2 Results
AB InBev Q1 Results
Direct Line Insurance Group Q1 Trading Statement
J D Wetherspoon Q3 Trading Statement
OSB Group Q1 Trading Statement
Renishaw Q3 Trading Statement
Shopify Q1 Results
Airtel Africa Full Year Results
BAE AGM Trading Statement
Balfour Beatty Trading Statement
Derwent London Q1 Corporate Sales Release
Flutter Entertainment Q1 Results
Harbour Energy Trading Statement
IMI Q1 Interim Management Statement
ITV Q1 Trading Statement
John Wood Group Q1 Trading Statement
Rathbones Q1 Interim Management Statement
TBC Bank Group Q1 Results
3i Group Full Year Results
International Consolidated Airlines Group Q1 Results

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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