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Home » UK Shares » Companies Reporting » Companies Reporting: Shell, Microsoft, Anglo American, Apple

Companies Reporting: Shell, Microsoft, Anglo American, Apple

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Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 25 – 29 July 2022

  • Compass Group will show whether their confidence on margins remains valid.
  • easyJet will reveal the impact of cost pressures and operational constraints.
  • Modern nicotine offerings could be key to underpinning British American Tobacco’s
  • Microsoft will hope to shrug off negative market sentiment.
  • It will be revealed whether Shell’s planning to up it’s shareholder rewards.
  • Anglo American looks to steady the ship as recession fears bring commodity prices down.
  • Apple expect a big hit to sales due to supply chain disruption and weaker demand in China.

Compass Group, Q3 trading, Tuesday 26 July

Steve Clayton, Fund Manager at HL Select “All eyes will be on the momentum in their US business, far and away their strongest growth engine in the group. Compass are famous for stressing cost control 24/7/365 and recent volatility in food and energy costs, along with wage pressure will have been challenging. So far, the group have been very confident on margins looking forward, but this could be the moment when the picture changes.

The group can’t be too worried though, for they recently announced the acquisition of Fresh Ideas, a Missouri-based catering operator, taking the group further into the US market. Compass have a strong balance sheet and can afford to have more of these earnings enhancing deals, so long as trading remains upbeat.”

easyJet, Q3 Trading Statement, Tuesday 26 July

Charlie Williams, Equity Research Assistant “easyJet faces significant operational headwinds as we enter the summer months, providing a difficult time for a new Chief Operating Office to take over. Despite expectations of returning capacity to 90% of pre-pandemic levels, guidance was lowered to 87% for the third quarter.  Further constraints around staff shortages, air traffic control delays and increased flight turnarounds at key locations such as Gatwick airport have shaken the airline. It is expected that there will be further capacity downgrades in the upcoming release.

easyJet operates a low-cost business model with small margin for error. Its reliance on one of the worst impacted airports in Europe, Gatwick, has added additional pressure to operations not as widely seen by its competitors based out of less constrained airports.

Looking ahead, easyJet remains well covered against rising fuel costs, with around 71% hedged in the second half. However, analysts are expecting inflationary pressures (excluding fuel) to remain, with passenger fares not able to offset rising costs as we head into the winter months.

There will be close attention paid to how management expects cost pressures, matched with operational constraints at key locations, to delay the return to profitability in the short to medium term.”

British American Tobacco, Interim results, Wednesday 27 July

Steve Clayton, Fund Manager at HL Select “The group has already confirmed that it is exiting from Russia, but the ongoing effects of the war in Ukraine could still shape the group’s performance. Higher US gasoline prices are squeezing consumer incomes and could accelerate the already declining volumes of tobacco products sold in the key American market.

More globally, the group’s performance in lifting volumes in its Potentially Reduced Risk products, from vapes to modern oral nicotine offerings will be key to underpinning confidence in the group’s ongoing earnings power. BATS have already declared their dividend for the year and the stock offers an ongoing yield of 6.2%.”

Microsoft, Q4 Trading Statement, Wednesday 27 July

Sophie Lund-Yates, Equity Analyst “Microsoft has had a tough 2022 so far, with market sentiment not on its side. This is part of a wider market shift away from more highly valued growth stocks, as economic and market uncertainty weigh heavily.

With that in mind, Microsoft will need to put in an impressive performance next week, as the market needs more convincing than normal to have a positive reaction. Analysts are expecting quarterly revenue of $52.5bn. We’re cautiously optimistic the group can hit this target, as Microsoft’s technology – both software and cloud computing – are essential to individuals and businesses all over the world. That means it’s less vulnerable to people reining in spending.

That said, the outlook statement is one to watch. The group’s president recently spoke about how tight the labour market is, which could see staff costs rise permanently. The bigger question though is how the Activision Blizzard deal is going. Gaming is an exciting growth opportunity and we’d like some detail on progress for the year.”

Shell, Half Year Results, Thursday 28 July  

Laura Hoy, Equity Analyst “Shell will have benefitted from the high oil price at over $100 per barrel, through the second quarter. Some of that influx has been funnelled into buybacks and dividend hikes. Last we heard, management said it would pay out upwards of 30% of free cash flow from operations in the second half. And earlier this month, CEO Ben van Beurden said that “giving back more to shareholders” is a priority. Please remember no shareholder returns are guaranteed.

The group’s liquid natural gas arm will also be of interest. Abandoning operations in Russia is expected to lower production by 0.8m tonnes in the second quarter, with guidance in the range of 7.4-8m tonnes. Given this was meant to be a growth avenue, we’d like an update on where management sees this business heading.

Renewables will also be in focus as the conversation around how big oil can use the current conditions to supercharge their transition to greener alternatives. This unproven part of the business requires a lot of investment and has yet to turn free cash positive. Any indication that Shell’s renewable arm is nearing profitability will be welcome news.”

Anglo American, Half Year Results, Thursday 28 July

Matt Britzman, Equity Analyst “Following a blistering start to the year Anglo’s given up all its valuation gains. The prices of key commodities like iron ore, copper and nickel have all dropped from their highs and now trade below where they started the year, as recession fears creep in.

Anglo’s exposure to a diverse range of metals hasn’t been able to help, such is the widespread nature of the commodity decline. There have however, been some Anglo specific issues too. In April it was reported that production over the first quarter was 10% lower than last year, impacted by staff sickness and high rainfall – hopefully we’ll hear these issues have eased.

Nevertheless, the damage is done and production guidance was downgraded for a range of metals. At the same time, costs are now forecast 9% higher than previously expected.

On a positive note, after 4-years of hard work the Quellaveco project in Peru produced its first copper concentrate. Commentary is awaited on when commercial operations are likely to begin, with a few regulatory hurdles still to overcome.

Apple, Q3 Trading Statement, Thursday 28 July

Charlie Williams, Equity Research Assistant “Despite a worsening macroeconomic environment, Apple has previously shown how its loyal customer base and strong brand can hold it in good stead. The group had record revenues of $97bn in the second quarter. However, our attention will be on how China’s strict zero Covid-19 policy has impacted performance since then. Apple previously said it expects a $4-8bn hit to sales as supply chain disruption and weaker demand in China weigh on performance. While we are cautiously optimistic that headwind figure will sit at the lower end, continuing disruptions can quickly alter that.

Recession fears are yet to show through in the consumer demand for Apple products, however, high inflation and the cost-of-living squeeze could leave a dent in revenues. With a new iPhone anticipated to launch later this year, we are watching to see if consumer demand meets expectations this quarter as an indication to future revenue.

Looking past revenues, Apple aren’t immune to rising costs. With factory closures and transport costs increasing, we will be keeping an eye on how this has impacted operating profits.”

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

25-Jul
VodafoneQ1 Trading Statement
RyanairQ1 Trading Statement
26-Jul
AlphabetQ2 Trading Statement
BridgepointHalf Year Results
Coca ColaQ2 Trading Statement
CompassQ3 Trading Statement
DraxHalf Year Results
EasyjetQ3 Trading Statement
Games WorkshopFull Year Results
GreencoreQ3 Trading Statement
InformaHalf Year Results
LVMHHalf Year Results
McDonaldsQ2 Trading Statement
MicrosoftQ4 Trading Statement
MitieQ1 Trading Statement
TymanHalf Year Results
UnileverHalf Year Results
VisaQ3 Trading Statement
27-Jul
British American TobaccoHalf Year Results
FresnilloQ2 Production Report
GlaxoSmithKlineQ2 Trading Statement
Lancashire Holdings LtdQ2 Trading Statement
Lloyds Banking GroupHalf Year Results
MetaQ2 Trading Statement
Paragon BankingQ3 Trading Statement
Primary Health PropertiesHalf Year Results
Provident FinancialHalf Year Results
Reckitt BenckiserHalf Year Results
Rio TintoHalf Year Results
Smurfit KappaHalf Year Results
SpotifyQ2 Trading Statement
UniteHalf Year Results
Wizz Air HoldingsQ1 Trading Statement
28-Jul
Anglo AmericanHalf Year Results
AB InBevQ2 Trading Statement
AmazonQ2 Trading Statement
AppleQ3 Trading Statement
AVEVAQ1 Trading Statement
BAE SystemsHalf Year Results
BarclaysHalf Year Results
BT*Q1 Trading Statement
CentricaHalf Year Results
CMC MarketsQ1 Trading Statement
CVS GroupTrading Statement
DiageoFull Year Results
EVRAZQ2 Trading Statement
FDM GroupHalf Year Results
Greencoat UK WindHalf Year Results
HammersonHalf Year Results
InchcapeHalf Year Results
IndiviorHalf Year Results
ITV*Half Year Results
National ExpressHalf Year Results
NestleHalf Year Results
Rathbone BrothersHalf Year Results
RelxHalf Year Results
RentokilHalf Year Results
SchrodersHalf Year Results
SEGROHalf Year Results
ShellHalf Year Results
Smith & NephewHalf Year Results
St James’s PlaceHalf Year Results
VesuviusHalf Year Results
WeirHalf Year Results
29-Jul
AstraZenecaQ2 Trading Statement
Croda InternationalHalf Year Results
IMIHalf Year Results
International Consolidated AirlinesHalf Year Results
IntertekHalf Year Results
Jupiter Fund ManagementHalf Year Results
Morgan Advanced MaterialsHalf Year Results
NatWestHalf Year Results
RightmoveHalf Year Results
Standard CharteredHalf Year Results

This article is 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.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

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