Companies reporting this week

By THIS IS MONEY
Updated:

 

INVESTORS will be scouring results from some of Britain's biggest companies this week to see the impact of the economic slowdown on earnings. Banking group Barclays is expected to report a 5% slip in pre-tax profits to £1.88bn on the back of rising costs when it reports on Thursday, fund manager Gerrard is forecasting.

Analysts say cost growth is an issue for the group and they will be seeking comfort that costs are flattening, although its underlying businesses are expected to have performed strongly at the operating level. The City will be keen to ask about its exposure to struggling corporates and beleaguered industries in the current market turmoil.

Media group Pearson's business is heavily weighted towards the second half of its financial year, meaning figures for the first half year are forecast to show a small loss when it reports today, against a £5.3m profit last time. The group's newspaper business has suffered in the advertising downturn and analysts do not expect a recovery at its FT Group business this year, which includes the Financial Times as well as newspapers abroad. Fund manager Gerrard said the main focus at this stage was the progress of its US education business supplying schools and colleges with items such as textbooks.

In February energy giant BP reported a sharp fall in quarterly profits as demand for oil and gas tumbled in the face of the economic slowdown, and after the oil price fell. Second-quarter figures, due on Tuesday, are also expected to show a slide, to $2.06bn (£1.3bn) against $3.43bn (£2.2bn) last time.

Analysts will however be more interested in comments on whether the outlook for its operations is looking any brighter.

Rival Shell's last quarter figures also showed a slide for the same reasons as BP - a slower economy and falling oil prices. Its second quarter figures, out on Thursday, are forecast to show a slide in pre-tax profits, down to $2.42bn (£1.55bn) against $3.52bn (£2.26bn). Production volumes however should see a boost as Enterprise Oil, which it bought earlier this year for £3.5bn, is integrated into the second-quarter numbers.

Anglo-Dutch group Unilever is forecast to report second-quarter pre-tax profits of £1.9bn when it reports on Wednesday, up from £1.5bn the same time the previous year. The group recently estimated its second-quarter earnings would rise by 20%, although analysts said turnover, which fell by 1% in the first quarter may show a similar decline in the second. The sales fall is expected to be on the back of disposals. The group's core brands however, including Hellman's Mayonnaise, Dove soap and Magnum ice cream, are expected to show growth of around 4.5%.

Life insurer Friends Provident, which demutualised last July and raised £1.6bn in the process, will announce half year figures on Wednesday, expected to show pre-tax profits of £165m, up from £131m. Analysts are keen to know whether the slide in stock markets has meant the management will review the total dividend it is due to pay shareholders - indicated to be around 7p.

The group's life and pensions new business sales grew 10.2% in the first quarter although margins on new business last year slipped, and analysts will be keen for an update from the group about the trends in both of these.

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