There’s no doubt what will be the first order of business for investors as they open Shire Plc’s (LON:SHP) results statement.
Numbers due Thursday will plainly be overshadowed by takeover talk.
Shire on Wednesday said it was willing to recommend an improved takeover offer from Japan’s Pharmaceutical Company, now pitched at around £46bn or £49 per share (up from £43mln). The proposed offer would comprise the equivalent of about £27.2 in Takeda shares and £21.7 in cash for each Shire share.
The company added that it would extend a regulatory deadline for the takeover negotiations to 8 May to allow Takeda to carry out more due diligence.
The drug maker's actual 1Q results should give first insight into separate reporting of its Neuroscience division.
Analysts at Deutsche Bank expect Shire to deliver 4% product sales growth in 1Q helped by a 2-3% currency tailwind.
However, they expect the drug group’s non-GAAP EPS to be down 5% on a reported basis reflecting margin impact from generics to Lialda, a drag from Covington setup costs and tough year-on-year comparables from strong gross margin phasing.
Barclays tackles past misconduct
For Barclays, PPI is one of a series of scandals it has been trying to put to rest.
British regulators have proposed that chief executive Jes Staley pay an undisclosed fine for trying to unmask a whistleblower.
In March, the lender also agreed to pay US$2bn in a settlement with US authorities over claims the bank mis-sold mortgage backed securities in the lead up to the financial crisis.
On top of that, the UK’s Serious Fraud Office has charged the bank with unlawful financial assistance over a US$3bn loan provided to Qatari investors as part of an emergency fundraising at the height of the financial crisis in 2008.
As for PPI, Barclays saw charges related to the issue fall by £300mln to £700mln in 2017 but faces further claims ahead of the deadline.
The bank reported a full year loss for 2017 but said it planned to raise its dividend in 2018 after keeping the payout unchanged.
It has also made progress in turning around the corporate and investment bank so investors will be looking for signs of further improvement in the first quarter.
Oil price recovery a boost to Shell
With the price of crude steadily above US$70, there’s likely to be an air of positivity as London’s largest oil firm reports results on Thursday.
Although the company has been promoting its ‘transition’ towards cleaner fuel and its ‘new energies’ business unit, the present day company is inextricable from oil and gas.
Naturally, investor attentions will look to Shell’s cash flow metrics and commentary around the group’s popular dividend.
Morgan Stanley, which rates Shell as its ‘top pick’, said it is a standout in the sector.
“For Shell, apart from higher contribution of the upstream segment, strong results from the integrated gas segment, normalisation of refining trading profits and strong chemicals all will likely provide strength to net income, although we forecast only a 25% quarter/quarter increase in the first quarter,” said Martijn Rats, Morgan Stanley analyst.
Thursday April 26:
ECB monetary policy meeting
Interims: Barclays PLC (Q1) (LON:BARC), Royal Dutch Shell PLC (LON:RDSA), Shire Plc (Q1) (LON:SHP), Weir Group PLC (Q!) (LON:WEIR)
Finals: Capita PLC (LON:CPI), Air Partner PLC (LON:AIR), N Brown Group PLC (LON:BWNG), Morses Club Plc (LON:MCL), U And I Group PLC (LON:UAI)
Trading updates: Taylor Wimpey PLC (LONTW,), Domino’s Pizza Group PLC (LON:DOM), Cobham PLC (LON:COB), Elementis PLC (LON:ELM), Hastings Group Holdings PLC (LON:HSTG), KAZ Minerals PLC (LON:KAZ), Meggitt plc (LON:MGGT), Synthomer PLC (LON:SYNT)
Ex-dividends: FTSE 100 – Antofagasta PLC (LON:ANTO), Fresnillo PLC (LON:FRES), Legal & General Group PLC (LON:LGEN), RELX PLC (LON:REL), Rolls-Royce Holdings PLC (LON:RR.)
Economic data: CBI distributive trades survey; US weekly jobless claims, US international trade in goods; US durable goods orders