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Week Ahead: Shell expected to announce unchanged dividend for 2017

Last updated: 06:05 29 Jan 2017 GMT, First published: 17:05 27 Jan 2017 GMT

Shell worker

Thursday is the big day for results, as usual, with Royal Dutch Shell and AstraZeneca among the titans reporting.

Colin Smith at Panmure Gordon will be looking for a continuation of the substantial recovery in performance that was evident in the third quarter numbers.

A seasonal increased in production and resurgent oil and gas prices have definitely brightened the picture at Shell, and it might even be able to return soon to funding its handsome dividend from cash flow.

Panmure Gordon expects cash flow from operating activities to increase quarter-on-quarter to US$9bn.

The Anglo-Dutch integrated energy giant usually announces its dividends for the next financial year in the fourth quarter results statement, and Smith has not exactly put his neck out by predicting an unchanged quarterly dividend of 47 cents.

It has been a subdued start to the year for AstraZeneca, at least on the share price front.

The shares are off 5%, despite some decent news flow, such as the refinement of its MYSTIC trial, which is designed to assess the benefit of durvalumab monotherapy, as well as a durvalumab and tremelimumab (durva and treme) combination therapy versus chemotherapy in non-small-cell lung cancers.

JP Morgan Cazenove is forecasting fourth quarter product sales of US$5,350mln, which is just ahead of the consensus forecast on Astra's web site.

Caz's core earnings per share forecast of US$1.20 is six cents higher than the market consensus.

Cranswick is expected to show top-line growth of around 15% year-on-year by Peel Hunt when the pork products supplier issues its third quarter interim management statement on Monday.

“Deflation is easing and the company is now having to cope with rising pig prices, which have risen from 112p in February 2016 to 155p currently. This will impact H2 margins, although this is being offset by high export prices to China,” the broker noted.

On the economic front, Howard Archer, chief UK & European Economist at IHS Global Insight, reckons the Bank of England is certain to kick off 2017 by keeping interest rates unchanged at 0.25% at its February policy meeting.

“The Monetary Policy Committee (MPC) will highly likely retain its neutral stance on the future direction of monetary policy – although there will be interest  as to whether the committee members are being influenced significantly by the ongoing resilience of the UK economy and likely higher than previously expected consumer price inflation in the near term at least. GDP growth of 0.6% quarter-on-quarter in the fourth quarter of 2016 was above the 0.5% rate expected by the MPC at their December meeting,” Dr Archer noted.

Significant announcements expected

Monday

Interims: Cranswick plc (LON:CWK), Filtronic PLC (LON:FTC)

Tuesday

Finals: Aberforth Smaller Companies Trust PLC (LON:ASL), Ocado Group PLC (LON:OCDO), Oxford Biodynamics PLC (LON:OBD), Toople PLC (LON:TOOP)

Interims: Alumasc Group PLC (LON:ALU)

Trading statements: Britvic PLC (LON:BVIC), Intermediate Capital Group PLC (LON:ICP), SSE plc (LON:SSE)

Wednesday

Finals: Future PLC (LON:FUTR)

Trading statements: Talktalk Telecom Group PLC (LON:TALK)

Thursday

Finals: AstraZeneca PLC (LON:AZN).

Trading statements: Aberdeen Asset Management PLC (LON:ADN), Compass Group PLC (LON:CPG), Cranswick plc (LON:CWK), Vedanta Resources PLC (LON:VED), Vodafone Group PLC (LON:VOD)

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