After the recent lull, we’ll have plenty of news from FTSE 100 companies coming our way next week, mostly in the form of quarterly or half-year results. And it’s spread across a number of key sectors too, so it’ll be a big week for market-watchers.
We’ve already taken a look at three companies updating us next week, so here are three more juicy updates coming our way from London’s top index:
ARM Holdings, Wednesday
It’s second-quarter and first-half results time for ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) on Wednesday, following on from strong Q1 figures for 31 March. In that quarter, revenue was up 28% over the same period the previous year, to £170.3m. Pre-tax profit climbed by 44% to £89.4m, with earnings per share (EPS) up 58% to 5.31p.
Forecasts suggest a 40% rise in EPS for the full year to December 2013, with a 20% rise currently pencilled in for 2014. But what does that say about valuation?
Well, ARM shares have soared by more than 90% over the past year, to 915p at the time of writing, but that only tells part of the story. The price reached 1,108p on 16 May, putting the shares on an eye-watering forward P/E of 53! It then crashed by a third to 752p on 24 June, before recovering to today’s price — we’re now looking at a P/E of 43.
Moving firmly away from high-risk high-growth, we come to Unilever (LSE: ULVR) (NYSE: UL.US), that stalwart of safe investing. And it will be time on Thursday for first-quarter results from the household products manufacturer.
Unilever has recorded rising EPS for three years in a row, with a 10% gain for December 2012, and has lifted its dividend every year since the crunch year of 2009. There’s a flat year forecast for 2013, but the dividend is expected to be lifted by around 15%, which is nice — though that should provide a yield of only a modest 3.2% on today’s price of 2,763p.
And that dividend comes at the price of a P/E of nearly 20, which is significantly above the FTSE’s long-term average of around 14. That’s too high for me for a company of this nature, but clearly some are prepared to pay high prices for reliable payouts.
Thursday is also first-half time for Rolls-Royce Holdings (LSE: RR), and it’s another whose shares have done well over the past year — up more than 35% to today’s 1,190p. The firm’s first quarter interim statement in May told us that trading had been in line with expectations and that guidance for the full year was unchanged — we should be seeing modest growth in revenue with “good growth” in underlying profit.
City analysts interpret that as a 12% rise in EPS for the year to December 2013, putting the shares on a P/E of just under 18. Last year Rolls-Royce paid a dividend of 19.5p per share for a yield of 2.2%, and though that’s predicted to rise to about 21.7p this year, the yield would fall to 1.8%. But it should be pretty safe, covered three times by earnings.
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> Alan does not own any shares mentioned in this article. The Motley Fool has recommended shares in Unilever.
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