The boss of under-pressure educational publishing giant Pearson PLC (LON:PSON) this week got an unfavourable mention in the Financial Times, the business-focused newspaper the firm formerly owned.
An FT article highlighted that a group of international teaching unions are calling for Pearson’s CEO John Fallon to be sacked for the group’s poor performance – it has issued five profit warnings in the past four years due to troubles in the US education market.
Fallon will face investors at Pearson’s annual general meeting on Friday, with a first-quarter trading update also expected from the group which in February reported a 21% drop in full-year 2016 profits.
READ: Pearson confirms massive 2016 loss after huge write-downs
CLICK HERE: For a daily round-up of all the Proactive news
However, in a preview of the first-quarter update, Liberum analyst Ian Whittaker said he “would not expect much of detail to come from this”.
The analyst noted: “Pearson is very 2H weighted so expect a bland statement about how it remains on track”.
On a potential disposal of its 47% stake in book publisher Penguin Random House, Whittaker pointed out that Germany’s Bertelsmann - the 53% owner with whom Pearson is negotiating - has suggested a deal will be done in the next several months so he “would not expect a definitive statement here.”
And on Fallon stepping down, the analyst said he “would not expect that but we do expect a lot of negative comments about his compensation where Pearson plans to hand him a 20% pay increase despite the problems with the company.”
Pricing comments eyed from British Airways owner IAG
International Consolidated Airlines Group (LON:IAG) - the owner of carriers British Airways, Aer Lingus, Iberia, and Vueling - will also report first quarter numbers on Friday, with Deutsche Bank predicting underlying earnings (EBITDA) of €179mln.
In a preview, the bank’s analysts said: “In our view IAG remains the best positioned legacy carrier group in Europe and should see a strong year of earnings.”
However, they recommended investors watch for pricing comments as there has been a clear industry-wide improvement although oil prices have also risen sharply.
Staying with the travel sector, InterContinental Hotels Group PLC (LON:IHG) is expected to also unveil a positive first-quarter trading update, with a recovery in US and European markets, helped by an additional boost from the later Easter holidays.
In a preview, analysts at Barclays Capital are forecasting IHG to report growth of 2.9% in its revenue per available room – the industry’s key metric – with America contributing 2% growth, Europe 8%, and China 3.5%.
US non-farm payrolls predicted to bounce back
Away from the corporate updates, the market’s focus will undoubtedly be on the latest, always volatile US jobs report, especially after this week’s Federal Reserve policy statement tightened expectations for a likely further US rate hike next month.
The traditional precursor for the monthly report, ADP’s private sector payrolls data released on Wednesday showed growth of 177,000 for April, pretty much as expected.
Last month the ADP number beat expectations by around 80,000 jobs, which led many analysts to upgrade their forecasts for the March non-farm payrolls release.
But these missed even the unrevised predictions by over 70,000 raising concerns about the outlook for this Friday’s number.
David Morrison, senior market strategist at SpreadCo, said: “The expectation is that last month’s number was a seasonal aberration, so the hope is we get a strong bounce-back in the data”.
He added: “The current forecast is for a gain of around 200,000 after the 98,000 recorded in March.”
Significant events expected on Friday 5 May:
Trading updates: Pearson PLC (LON:PSON); InterContinental Hotels Group PLC (LON:IHG); Smith & Nephew PLC (LON:SN.); BBA Aviation PLC (LON:BBA)
Interims: International Consolidated Airlines Group PLC (LON:IAG); Millennium & Copthorne Hotels PLC (LON:MLC), McCarthy Stone PLC (LON:MCS); Smurfit Kappa Group PLC (LON:SKG)
AGMs/EGMs: InterContinental Hotels Group PLC (LON:IHG); FBD Holdings PLC (LON:FBH); Smurfit Kappa Group PLC (LON:SKG); Pearson PLC (LON:PSON); Man Group PLC (LON:EMG); T Clarke PLC (LON:CTO)