BP reports its fourth quarter numbers against a backdrop of the small rally in the oil price showing signs of petering out.
Nevertheless, investors will be looking for the oil giant to reduce capital expenditure to protect the dividend.
Barclays noted that capital expenditure (capex) in the coming three years looks to be some 30% lower than was originally planned when oil was selling for $US60 a barrel.
“Our dynamic modelling shows that even in the event of an oil price of $40/bl prevailing, BP could respond by reducing capex a further 20% to US$14bn, which would allow the management to balance the books by 2018 with the current level of dividend maintained. Key to BP's share price performance in the coming 12 months is continued evidence of the company's ability to control costs,” Barclays opined.
Groceries deliveries specialist Ocado continues to grow online sales at the sort of rate that would delight most of the Big Four supermarkets, but its fiscal fourth quarter growth was a shade on the disappointing side.
Numis Securities said the shortfall largely reflected the impact of market moves in pricing, especially in fresh food
“Notwithstanding the slower Q4 sales rate, we left our FY EBITDA [full-year underlying earnings] estimate of £80.7m unchanged; this would represent YOY [year-on-year] growth of +13% – an impressive achievement given the challenges in the food retail market. The Q4 statement had, as expected, no commentary on an Ocado Smart Platform agreement – a deal will be announced as and when one is signed – but, having initially stated in February that it was ‘targeting to sign the first such agreement during 2015’, and that target having now passed, we look for an update to this guidance at the full year results,” Numis said.
The analysts that follow the company are going for sales of £1.1bn and profit before tax of £12.5mln, giving earnings per share of 2.05p.
Significant announcements expected
Finals: Low & Bonar (LON:LWB), Ocado Group (LON:OCDO), St Modwen Properties (LON:SMP)
Interims: Alumasc Group (LON:ALU), BP (LON:BP.), Mattioli Woods (LON:MTW), NWF Group (LON:NWF)
Economic: UK – Construction PMI