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Eyes Down For HSBC Holdings plc’s Results

HSBC Holdings (LSE: HSBA) (NYSE: HBC.US) is set to announce its half-year results on Monday, 5 August (at 9.15am).

At the time of writing, HSBC’s shares are trading at 731p – pacing the 4% rise of the FTSE 100 over the past six months.

How will HSBC’s business have performed in the first half compared with last year’s first half? And will the company be on track to meet forecasts for this year’s key full-year numbers? Here’s your cut-out-and-check results table!

  H1 2012 FY 2012 H1 2013 Forecast
FY 2013
Forecast
FY growth
Net operating income* $36.9bn $68.3bn ? $68.3bn 0%
Profit before tax (£bn) $12.7bn $20.6bn ? $27.0bn +31%
Earnings per share (EPS) $0.45 $0.74 ? $1.05 +42%
Dividend per share $0.18 $0.45 ? $0.53 +18%
Net asset value (NAV) per share $8.73 $9.09 ? $9.64 +6%

* Before loan impairment charges and other credit-risk provision

Sources: HSBC financial reports and HSBC-provided consensus estimates as at 02/07/2013.

Operating income and profit

City analysts are expecting a big improvement in performance from HSBC this year. While the consensus is for net operating income to be flat, a whopping 31% increase in profit before tax has been pencilled in. The uplift comes essentially from expectations of a $5.4bn reduction in operating costs and a $2.3bn fall in loan-impairment charges.

During May, HSBC reported first-quarter net operating income of $18.4bn. A repeat of that in Q2 would give $36.8bn for the first half, which would be both in line with last year’s H1 and consistent with analyst forecasts for a flat full year.

Underlying profit before tax for the first quarter came in at $7.6bn, up 34% on Q1 2012, and, again, broadly consistent with analyst forecasts of a 31% profit uplift for the current full year. A first-half number in the $15bn region would put HSBC more than on track to meet City full-year expectations.

EPS, dividend and NAV

Analysts are forecasting EPS to advance well ahead of profit before tax. This is because the EPS number is derived from profit after tax, and the experts are expecting HSBC’s tax rate to be lower this year than last. EPS for last year’s first half was $0.45, so look for a number comfortably ahead of that this time — something above $0.50 would put the group on course to meet analyst expectations of $1.05 for the full year.

HSBC’s policy is to pay equal dividends for the first three quarters of the year and a variable fourth. The board has already told us it will be paying a $0.10 dividend for the first three quarters of 2013. The first $0.10 dividend has already been delivered, and shareholders can expect to see a second payout at the same level.

Finally, turning to assets, analysts see NAV per share advancing 6% from $9.09 at the end of last year to $9.64 by the end of 2013. Keep an eye out for whether half-time NAV-per-share is heading in the right direction.

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> G A Chester does not own shares mentioned in this article.