Market Preview is published daily an hour before trading kicks off on the London Stock Exchange, giving investors a roundup of macroeconomic and corporate news that is likely to move the markets along with the expected opening level of the FTSE 100.


Thursday's agenda: No reason to go overboard on Carnival

December 19 2012, 6:07pm
After showing a 0.6% rise year-on-year in October, the retail sales growth rate is expected to have quickened to 1.5% in November.

Cruise ships operator Carnival (LON:CCL) issues its full-year results on Thursday, with the market expecting earnings per share of US$1.86, one cent above the mid-point of the company’s own guidance range.

“In November Carnival announced a $0.50 special dividend which suggests to us that bookings have continued to improve ahead of trend in the weeks following the group’s Q3 results, mirroring recent comments from Royal Caribbean,” Panmure Gordon notes.

The broker is bearish on the stock.

“With the ‘fiscal cliff’ looming in its hitherto resilient home US market, signs of other economies slowing rapidly and the impact of [the] Costa Concordia [crash] on the new to cruise market more significant than management expected we think the increase in net revenue yield in FY 2013E will be just 2.0% (following a 5.0% decline in FY 2012E). We forecast 2.0% net cruise cost (excluding fuel) increases and a c3% increase in fuel costs,” Panmure Gordon said.

Outsourcing giant Serco (LON:SRP) is set to issue a pre-close statement. Earlier this month the group lost its contract to run the National Physical Laboratory but the setback barely registered on the share price, suggesting to Michael Donnelly of Westhouse Securities that the shares are primed for bad news.

Retail sales data might bring a bit of cheer to hard-pressed retailers. After showing a 0.6% rise year-on-year in October, the growth rate is expected to have quickened to 1.5% in November.


Announcements expected

Companies: Serco, Carnival,
Macroeconomic: UK Retail Sales, Canadian Retail Sales, US Existing Home Sales, Philly Fed Manufacturing Index

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