Industry-wide supply issues have affected both mining giants in the past year, with disappointing macroeconomic data and weakening demand leading to lower prices across the industrial metals.
On Wednesday, Rio said it kept iron ore production on track and reported that mining in Pilbara - Western Australia, where it generates about half of all revenue – unearthed 87.3mln tonnes of iron ore, up 6% against the same period last year.
The numbers signal a potential recovery from the “operational challenges”, according to Rio.
At the start of the week, analysts had expected BHP may have outperformed Rio as the more diversified peer will see an additional boost due to a ‘decent’ oil price.
Petroleum production figures are forecast by BoA Merrill Lynch to decline up to 7% in the next year because of natural field decline, though bigger news may come from BHP’s petroleum briefing on 11 November, where the analysts expect an update on strategy for the division “and a deep dive into its growth options as BHP seeks to offset declining production and rising unit costs”.
WH Smith outlook eyed
With less digital kudos but a more than just reliable retail investment in recent years, WH Smith PLC (LON:SMWH) puts out final results on Thursday a few weeks after saying profit margins and stores openings were “in line with plan”.
UBS forecasts full year PBT of £156mln, with the travel arm seen as the driving force, with a first-time contribution from US acquisition InMotion.
“Key issues going forward will likely be any potential Brexit impact on airport passenger numbers, the growth rate of the Travel business and any news on the opening of full-line Travel stores in the US,” analysts said.
Domino’s looking to make progress with franchisees
Domino’s Pizza Group PLC (LON:DOM) posts its third quarter trading update on Thursday.
In July the pizza chain had 15% sliced off its share price after reports of falling profits and a dispute with its franchisees, who were refusing to open new stores until they were granted a greater share of its profits.
This was quickly followed in August by pizza chief executive David Wild announcing his retirement under a cloud - after Domino’s was accused of misleading its investors about the row with its franchisees.
Investors will be scanning the statement for any news over whether Domino’s has made any progress toward clearing the impasse with its franchisees the not-yet-announced incoming chief executive.
Analysts are expecting like-for-like sales to be up 4% across UK and Ireland LFL, a small improvement on the first half’s 3.9% growth.
Moneysupermarket revenues seen slowing
Analysts expect revenue growth is likely to slow down, contracting from 8% to 4% quarter-on-quarter, only to pick up in Q4, though the switching environment may be challenging.
The consensus for full-year underlying earnings is £142mln, with UBS proposing an optimistic £143.5mln, who rates it as a “buy”, on the back of traction in policy monitor and credit scoring.
The quarter may be less buoyant as energy switching was down 9% year-on-year in June but rebounded in July and August with a 10% and 15% growth respectively, while motor insurance pricing is expected to improve after a weak Q2 performance.
Significant events on Thursday 17 October:
Finals: WH Smith PLC (LON:SMWH)
Trading statement: BHP Group PLC (LON:BHP), Domino's Pizza Group PLC (LON:DOM), Moneysupermarket.com Group PLC (LON:MONY), National Express Group PLC (LON:NEX), Rank Group PLC (LON:RNK), Rathbone Brothers PLC (LON:RAT), Rentokil Initial PLC (LON:RTO), Unilever PLC (LON:ULVR)
Economic announcements: UK retail sales, UK credit conditions, European Council meeting, US housing starts, US jobless claims, US industrial production