Companies reporting this week

By THIS IS MONEY
Updated:

 

HEAVYWEIGHT stocks return to the corporate arena this week as the likes of Shell, GlaxoSmithKline and Allied Domecq report to shareholders.

Oil giant Shell is certain to report further strong earnings growth - up to $3.13bn (£1.87bn) from $2.24bn (£1.34bn) a year earlier - when it announces figures for its third quarter on Thursday.

Higher oil and gas prices following the Iraq conflict will again be the main reason for the rise, although the warm weather in Europe will have offset some of the benefits.

On Tuesday,Allied Domecq will be under pressure to give investors some good news after its unsuccessful attempt to buy Australian company Peter Lehmann Wines.

Profits are likely to be unchanged on a year earlier at £480m, but this is more to do with higher pensions costs, the weakness of the US dollar and inventory de-stocking than weak trading conditions.

In the wake of its failure to win the support of the Peter Lehmann board for its takeover, Allied is likely to indicate that it is still interested in establishing a presence in the Australian wine market.

Guidance from chip designer ARM Holdings that third quarter revenues will be 'flattish' has led fund manager Gerrard to forecast pre-tax profits of £5.5m against £6.5m in the previous three months ahead of results on Tuesday.

Lower royalty income because of deflation and a build up in inventories in Asia is likely to have affected turnover, which is also generated through the licensing of Cambridge-based Arm's designs.

On Wednesday, third quarter results from drugs giant GlaxoSmithKline will provide investors with a chance to gauge the impact of generic competition.

The launch of a copycat version of its blockbuster anti-depressant Paxil by rival Apotex in September has focused attention on efforts to get patients onto new version Paxil CR, which is still covered by patent and now represents approximately 40% of new Paxil prescriptions in the key US market.

Despite the competition, pharmaceutical sales are likely to show growth overall and, with costs under control, third quarter pre-tax profits are expected to rise to around £1.7bn from £1.4bn.

Generic competition has also hit Glaxo's rival AstraZeneca, which reports third quarter figures on Thursday. This time the competition affects ulcer drug Prilosec.

But the US debut of Astra's cholesterol-lowering drug Crestor could help plug the gap. And, if its gastrointestinal portfolio - where sales could be down by as much as 20% due to weakness from Prilosec - are stripped out, sales are expected to have grown by around 10%.

But spending on new launches is expected to have put a squeeze on margins and analysts at fund manager Gerrard are expecting third quarter pre-tax profits to have slipped to $855m (£511m) from $900m (£538m).

Third quarter figures on Wednesday from internet bank Egg are expected to provide further signs of contrasting fortunes between its UK business and its troubled French credit card venture.

The disparity between the two parts of the business has made predicting the company's performance a difficult task and forecasts of full-year pre-tax losses vary by as much as £52m.

Interest in the City is certain to be focused on the future of the French operation and whether major shareholder Prudential intends to sell its stake.

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