What's in store today....
BP (BP.) is expected to put Shell (RDSB) in the shade as it unveils bumper fourth-quarter profits.
Forecasts put the oil giant’s earnings at $4.87 billion (£3.1 billion) for the last three months of last year on a ‘clean’, ‘replacement cost profit’ basis, which strips out changes to the value of inventories.
At this level, BP would top the $4.84 billion reported by Shell last week.
Last year was one of consolidation for the company, with a large number of major upstream turnarounds completed.
"In 2012, if oil prices remain high, BP should benefit from the operational and financial benefits from those completed turnarounds and by the end of 2012 payments into the $20 billion (c£12.7 billion) trust fund come to an end," noted Tony Shepard, analyst at Charles Stanley.
BP trades on a 2012 price to earnings ratio of between six and seven times. While this is low compared to other oil majors, Shepard says the valuation reflects the potential fines from the Macondo oil spill and the uncertainty around the outcome of the Gulf of Mexico litigation process, which begins at the end of February.
"Furthermore, the Gulf of Mexico remains an important asset for BP and although the decline of oil and gas volumes may have stabilised, it may be 2013 before BP returns to historic levels of output in the Gulf," he added.
Anglo-Swiss mining giant Xstrata (XTA) will also come in the spotlight as it announces its full-year results. Shares in the company gained more than 10% this week after it emerged that it was in talks with its major shareholder, Anglo-Swiss commodities trader Glencore, about a merger of equals.
After AstraZeneca (AZN)'s cautionary statements regarding 2012, investors will look forward to GlaxoSmithKline (GSK)'s full-year results, also due on Tuesday.
"We are not envisaging the degree of volatility surrounding these results that was seen at others within the sector last week," voiced Charles Stanley's analyst, James Dawson, who rates the stock a 'hold'.
He anticipates that investors will also be eager to hear management's thoughts on US healthcare reform and European austerity measures, neither of which are likely to abate in the near term and hence providing negative pressures to the business. GSK's plans to capture market share in the fast-growing emerging market region will also be keenly awaited.
Shares in the pharmaceutical company are trading at a 33% premium to AstraZeneca.
Tuesday 7 February
Trading updates
BP, GlaxoSmithKline, Bellway, Xstrata, 888 Holdings, Tui Travel, Victrex, Talktalk Telecom Group, St Mowden Properties.
AGM/EGM/Special Meetings
Tui Travel, Pressure Technologies.
