Earnings reports from FTSE 100 companies are starting to drop off now, as we move past the interim season for firms with years ending December. But we still have a few important updates to come, so let’s take a quick look at two upcoming first-half reports from the insurance sector plus a look towards full-year performance in the tobacco business:
Prudential, Monday 12 August
The insurance sector has been going through a good patch recently, and first-half results from Prudential (LSE: PRU) (NYSE: PUK.US) due on Monday should hopefully add to the cheer. Prudential shares are up around 48% over the past 12 months, to 1,175p today, after the firm put in a 22% rise in earnings per share (EPS) for the year to December 2012. In fact, apart from a flat year in 2011, Prudential’s earnings have been regularly growing at a double-digit pace.
But what’s expected for 2013? Well, there’s a further 10% rise in EPS currently being forecast for both this year and next, with the shares on a forward P/E of 14 which is around the FTSE average. But the expected dividend isn’t really anything to shout about, with a yield of just 2.6% expected — there are others in the sector paying a lot more.
The first quarter of this year was pretty good, with asset management net inflows up 66% on the same quarter a year previously to £3.5bn, and new life insurance business in Asia was up 18%. Hopefully we’ll see more of the same on Wednesday.
Resolution, Tuesday 13 August
Fellow life insurer Resolution (LSE: RSL) is scheduled to deliver its first-half figures on Tuesday, and it too has had a good year with its share price up 50% over 12 months to 324p today.
Resolution’s first-quarter update in March was also pretty positive, telling us of its new business during the quarter rose 9% to £38m, with most of that in the UK — up 30% to £35m. Chief executive Andy Briggs said “We remain optimistic about the opportunities for profitable and cash generative growth going forwards“.
The City seems optimistic too, with analysts currently forecasting a 25% boost in EPS and a 6.4% dividend yield — but if that comes off, the dividend will only be barely covered. Resolution shares are on a forward P/E of 13.
Imperial Tobacco, Thursday 15 August
The tobacco business has not been as healthy of late, and shares in Imperial Tobacco (LSE: IMT) (NASDAQOTH.ITYBY.US) have been suffering — they’re down 15% over the past year to 2,138p today, even though EPS has been rising for years, albeit at a slower pace in the past year or two. How the firm is progressing so far this year should be apparent on Wednesday, when we should have an interim management statement.
At the first-half stage in March, stick-equivalent volumes were down 5.9% as the poisonous weed might finally be starting to lose some of its allure, with net tobacco revenue down 3.1% to £3.28bn and adjusted tobacco profit down 6.7% to £1.36bn, though the firm did lift its interim dividend by 11% to 35.2p per share.
Despite that, forecasts for the year to September suggest a small rise in EPS, which would put the shares on a P/E of just over 10, and there’s a dividend yield of more than 5% predicted.
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> Alan does not own any shares mentioned in this article.
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