Market experts are forecasting big profit increases at BP plc (LON:BP), Carnival plc (LON:CCL) and Associated British Foods plc (LON:ABF).
We all like to see growing profits at the companies we invest in. In the long term, increased earnings should result in a higher share price. Big profits improvements are expected at these three companies -- so are they worth buying today?
BP (LSE: BP) (NYSE: BP.US) has been paying a huge price for its role in the 2010 Gulf of Mexico disaster. This has done enormous damage to the company's recent profitability. The absence of large fines in future years will result in a dramatic improvement in profits.
Earnings per share (EPS) for 2012 is expected to be 171% higher than in 2011. This is then forecast to be followed by a 10.9% rise in EPS again for 2013.
What excites me most about BP shares is the dividend: the shares today come with an expected dividend yield of 6%.
Carnival (LSE: CCL) (NYSE: CCL.US) is a US-British company operating cruise brands such as P&O Cruises and Cunard.
It has been a tough year for Carnival. Last year's Costa Concordia disaster did huge damage to confidence in the company. The Concordia was operated by Costa Cruises, a Carnival brand.
2012 saw Carnival's EPS fall 19.4%. This is expected to reverse in 2013, with EPS forecast to hit $2.43. Earnings are expected to grow again in 2014. Even if 2014 forecasts are hit, profits and dividends will still be less than Carnival shareholders enjoyed before the financial crisis.
Associated British Foods
Associated British Foods (LSE: ABF) is a food and ingredients business. The company also owns discount clothing retailer Primark. ABF's brands include Silver Spoon, Twinings and Ovaltine. Its ingredients business supplies inputs such as enzymes and yeast to manufacturers.
ABF is forecast to grow EPS 17.5% in 2013, followed by another rise of 10.2% the year after. Unfortunately for bargain hunters, the share price looks well up with this news. ABF shares trade on a 2013 price-to-earnings ratio of 19.1 times expectations, falling to 17.3 for 2014.
Associated British Foods' growth forecasts are impressive. However, analysts here at the Motley Fool think that there is an even better growth investment opportunity on the market today. To find out more about this company and why our team of experts is convinced it will deliver for investors, get the free Motley Fool report "The Motley Fool's Top Growth Share For 2013". The report is 100% free and will be delivered to your inbox immediately. Just click here to learn all about this great growth opportunity today.
> David does not own shares in any of the above companies.