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Glaxo getting the tingles from its shingles jab

Trading updates from Glaxo, Standard Chartered and Next are likely to be the highlights
Shingles report
The launch of the shingles jab, Shingirx, offset declining sales of Meningitis and flu vaccinations.

Investment analysts will take time off from poring over the fine print of the chancellor’s budget to wade through another day of big company results.

A strong showing from its Vaccines division last time out meant second-quarter results from GlaxoSmithKline PLC (LON:GSK) were reasonably robust, and investors will be hoping for more of the same from the pharma group’s third-quarter results.

The vaccines division’s revenue rose by 16% in the second quarter to US$1.3bn, as the launch of the shingles jab, Shingirx, offset declining sales of Meningitis and flu vaccinations.

Shingirx will likely be carrying the team again this time out, according to George Salmon, equity analyst at Hargreaves Lansdown, with Glaxo having pinned their hopes on full-year revenue of £600mln-£650mln from the vaccine.

Salmon said: “Investors should be keeping an eye on cost savings too. GSK is trying to lop £400mln off the cost base by 2021. The costs associated with this are set to be £1.7bn over the next three years - hopefully those estimates stay flat.”

UBS estimates Glaxo reporting third-quarter sales of £8.03bn, core operating profit of £2.40bn, and core earnings per share of 33.0p.

Trade wars a concern for Standard Chartered​

Asia-focused lender Standard Chartered closes the batting in the banking results season, and a major concern will the risk of a further slowdown in China’s economy as the nation continues to bump heads with the US over trade.

UBS anticipates StanChart's third-quarter results will show weaker revenues with market volatility hurting wealth and corporate finance income.

It estimates revenue falling to US$3.68bn in the quarter from US$3.61bn last year and underlying pre-tax profit declining to US$900mln from US$1.04bn in 2017.

Next on an even keel​

A cut in business rates for small retailers announced in Monday’s Budget won’t be of any benefit to fashion flogger Next but it does at least signal the government is aware of the struggles the High Street is going through at the moment.

Expect cautious optimism from Next’s (LON:NXT) trading statement, with the fashion firm known for under-promising and, at least in happier times, over-delivering.

As such, September’s trading update, in which Next lifted its central guidance for annual pre-tax profit by £10mln to £727mln, broadly in line with last year’s profit of £726.1mln, bodes well for the retailer.

Before investors get too carried away, however, Next said it is budgeting for lower growth rates in the second half of this year.

Once again, expect the online division to lead the way; the retailer is hoping to push through an 8% increase in average margins online to make up for the profit on a 5% loss of sales in the bricks and mortar business in the first half of the year.

UBS forecasts full price sales growth for Next Brand of 2% in the third quarter.

Significant announcements expected

Interims: GlaxoSmithKline PLC (Q3) (LON:GSK), Standard Chartered PLC (Q3) (LON:STAN), Smurfit Kapa Group PLC (LON:SKG), Just Group PLC (Q3) (LON:JUST)

Trading updates: Next PLC (LON:NXT), ConvaTec PLC (LON:CTEC), Gem Diamonds PLC (LON:GEM), PPHE Hotel Group Ltd (LON:PPH), Computacenter PLC (LON:CCR)

AGMs: Maxcyte PLC (LON:MXCT), Rainbow Rare Earths Ltd (LON:RBW)

Economic data: UK GfK consumer confidence; US ADP employment change; US Chicago PMI


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