This Thursday has seen more swings in UK share prices amid a flurry of corporate releases, including an update from Royal Dutch Shell (LON:RDSA) which is soaring despite a drop in Q1 profits. Fortunes meanwhile have reversed for Lloyds Banking Group’s (LON:LLOY) shares which were in demand yesterday. Tomorrow will see HSBC Holdings (LON:HSBA) conclude the FTSE 100 banking reporting season.
Shell shines, Lloyds dips after results
Shell has been one of today’s most prominent UK risers, lending support to the benchmark FTSE 100 index even as it reported that its earnings had fallen to $5.3 billion, from $5.7 billion in the prior-year period, reflecting lower oil prices. The company, however, said that it had made ‘a strong start’ to the year, having benefitted from its Downstream business.
“Overall this was a strong set of results, backed up by solid cash flow delivery in the quarter,” Berenberg analyst Henry Tarr said, as quoted by Reuters. Shell’s shares are up more than two percent intraday.
Smith & Nephew (LON:SN) is also outperforming the broader London market with a nearly three-percent rise as it said that it was ‘increasingly confident’ that its underlying revenue growth will be in the upper half of its guidance range of between 2.5 percent and 3.5 percent.
Lloyds, however, is in the doldrums today as it posted a small rise in first-quarter profit, having booked charges over the payment protection insurance scandal, as well as over the exiting an investment management agreement with Standard Life Aberdeen (LON:SLA). The group’s shares are trading about one percent lower following yesterday’s gains when Lloyds’ move to lower its core capital ratio target fuelled hopes that the extra capital would be returned to shareholders via buybacks.
“Compensation for customers mis-sold PPI continues to gnaw away at Lloyds profits, whilst it missed on top line revenues in what’s probably not the best quarter for the bank,” said Neil Wilson of Markets.com, as quoted by Proactive Investors. “Net interest income remains ok but we wonder if there is enough in here to continue the rally in the shares.”
Shares in Paddy Power Betfair (LON:PPB) are being sold off even as the company reported a 17-percent rise in total revenue for the first quarter. The group, however, disclosed that its retail revenue had slipped lower. The bookmaker’s shares are changing hands more than five percent in the red.
Analyst comments are weighing on Bunzl’s (LON:BNZL) shares, which are more than one percent down today. Proactive Investors quoted Credit Suisse as saying that the FTSE 100 company’s update last month had warned of slowing growth, particularly in North America, its biggest market. The broker further reckons that Bunzl’s revenue growth and margins will be constrained this year by weakness in product input costs.
Shares in Rolls-Royce Holdings (LON:RR) have been volatile as the British engine maker said its trading had been in line with expectations, and reaffirmed its costs guidance for fixing its problematic Trent 1000 engines. The shares are now about one percent up, having traded in the red immediately following the statement.
UK share prices to watch on Friday
With the earnings ‘Super Thursday’ out of the way, investors will have fewer releases to look out for tomorrow. HSBC will be one of the UK share prices to watch, with the bank having posted a strong 2018, meaning that investors will want to see a continuation of that performance in the first quarter.
“What will be key for investors is the pacing of spending, as that has a direct knock-on for costs versus revenues,” Joseph Dickerson, a bank analyst at Jefferies told Bloomberg News. “I think they may be able to show positive jaws, as they are going to be able to pace investment. If they miss, it will be on revenues.”
Aaran Fronda, financial writer at IG, however, has cautioned that HSBC’s share price has fluctuated significantly, with the bank’s stock having lost more than 20 percent last year from a high of £7.91 back in January to £6.00 in late-October.
The results will come amid lacklustre Q1 performance for London-listed Lloyds, RBS (LON:RBS) and Barclays (LON:BARC), and strong results at Asia-focused peer Standard Chartered (LON:STAN).
Holiday Inn and Crowne Plaza owner InterContinental Hotels Group (LON:IHG) is also scheduled to report tomorrow. Last month, MainFirst started coverage of the company with an ‘outperform’ rating today, and a price target of 5,600p, commenting that it expected the trading update to “show a steady quarter-on-quarter revenue per available room trend and positive net system size growth momentum,” as quoted by Proactive Investors. Packaging company Smurfit Kappa Group (LON:SKG) also reports tomorrow.
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