With the earnings season gradually starting to wind down, investors have had fewer big swings in UK share prices to digest this Friday. Europe’s biggest bank HSBC Holdings (LON:HSBA), however, is at the top of the FTSE 100 leaderboard after cheering investors with better-than-expected first-quarter profit.
HSBC and AstraZeneca rise, InterContinental dips
HSBC is leading the blue-chip FTSE 100 index higher today after beating forecasts with a 31-percent rise in first-quarter profits, having benefitted from strong performance in Asia. The update concludes the FTSE 100 banking reporting season following lacklustre results from Barclays (LON:BARC), RBS (LON:RBS) and Lloyds (LON:LLOY).
Reuters quoted Joseph Dickerson at Jefferies as commenting today that Europe’s biggest bank had been one of the few lenders “reporting first quarter earnings that showed a favourable revenue mix”. Nicholas Hyett, analyst at Hargreaves Lansdown, meanwhile pointed out that HSBC’s strong performance in Asia was “welcome, since exposure to these high growth markets is central to the bank’s long-term prospects,” as quoted by Proactive Investors. The results come after Asia-focused peer Standard Chartered (LON:STAN) also posted a rise in Q1 profits and additionally cheered investors with a share buyback. HSBC’s shares are nearly three percent up in early afternoon trade in London, compared with about a 0.8-percent gain in the FTSE 100.
InterContinental has been another notable mover today, trading in negative territory, as it reported that its revenue growth had slowed in the first quarter of the year. The company, which owns the Holiday Inn and Crowne Plaza brands, disclosed that it had suffered weak performance in the Greater China region, partly offset by strong results in the Americas. InterContinental’s shares have given up a little over one percent today.
In addition to results, investors are also digesting an update from AstraZeneca (LON:AZN), whose shares have climbed higher as the company disclosed that the US Food and Drug Administration had approved its Qternmet XR extended release tablets as an oral adjunct treatment to diet and exercise to improve glycaemic control in adults with type-2 diabetes. The move marks a boost for the Anglo-Swedish drugmaker which has been counting on its pipeline of new treatments to propel growth, with some of its ‘blockbuster’ drugs suffering competition from cheaper generics. Last week, the company posted a rise in sales for the first three months of the year and reaffirmed its full-year guidance for a high single-digit percentage increase in product sales and core earnings per share of between $3.50 and $3.70. AstraZeneca’s shares are trading about 1.2 percent higher in London and are also 0.8 percent up in pre-market trading on the NYSE, according to Google Finance data.
UK share prices to watch next week
While the London market will be closed for an Early May Bank Holiday, investors will have more FTSE 100 company results to digest during the rest of the week, starting with ITV’s (LON:ITV) first-quarter update and annual general meeting on Wednesday. The results will come after the company warned earlier this year that economic and political uncertainty continued to impact the demand for advertising, and investors will be keen to get more information about the extent of that impact. The results will also likely include an update about BritBox, a new streaming service which ITV is working on alongside the BBC.
The media theme will continue on Thursday, when former telecoms monopoly BT Group (LON:BT.A) is set to post its full-year results. The update will come at a sensitive time for the company which is still dealing with the aftermath of an accounting scandal at its Italian business. IG reports that the company is expected to post headline earnings per share of 25.9p, down 6.7 percent over the year, and £23.7 billion revenue, marking a drop of 1.6 percent from a year earlier.
“Earnings have declined since 2016, from above 30p per share, and are expected to decline into 2020 before beginning a modest rebound,” Chris Beauchamp at IG commented in a note this week, adding that until the earnings trend has been reversed and BT “starts to see a rise in income, the focus will be on cost-cutting and holding the line on expenditure rather than focusing on growth and ways of gaining market share”.
Other blue-chips reporting next week include cigarette maker Imperial Brands (LON:IMB), housebuilder Barratt Developments (LON:BDEV), UK grocer Morrisons (LON:MRW), British Airways and Iberia parent International Consolidated Airlines Group (LON:IAG), and blue-chip insurers Direct Line Group (LON:DLG) and RSA Insurance (LON:RSA). The annual general meeting season is in full swing, with companies including BAE Systems (LON:BA), GlaxoSmithKline (LON:GSK) and StanChart set to face shareholders.
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