A couple of FTSE 100 names will dominate proceedings on Tuesday morning, with BP following its big rival and Standard Chartered coming at the end of banking results season.
BP PLC is likely to talk up renewables while it continues to enjoy rising oil profits.
Renewables will be on the agenda for BP PLC (LSE:BP.) as it releases its trading update on Tuesday, though the financials continue to be driven by the strong oil price.
July has already seen BP pledge up to £10bn of new investment in offshore wind in the UK North Sea as its bid for acreage in a government leasing round, along with plans to build interests in electric vehicle charging networks, green hydrogen, and shipbuilding.
The oil giant promised to make Scotland BP’s ‘global centre of excellence for offshore wind’, and, according to BP executive vice president Dev Sanyal, BP sees a resilient clean energy future for the country.
It’s the latest environmental flex from BP as it seeks to evolve and reduce at least the proportion of hydrocarbons in its business.
Right now, the focus operationally remains oil centric and current crude prices are boosting cash flows.
Second-quarter net income should come in at almost US$2bn, forecast UBS, down 24% on the preceding quarter but up from a loss of US$6.68bn a year ago when results contained a write-off of much of BP's intangible exploration costs.
“It needs to be borne in mind that the reason for the sequential decline is that BP booked a significant but not precisely disclosed gas and power trading profit associated with Storm Uri,” analysts said.
Big bank reports wrap up StanChart
A day after HSBC, Standard Chartered PLC (LSE:STAN) will issue its half-year numbers that will allow analysts to measure progress towards the broking community consensus forecast for full-year pre-tax profits of US$14.9bn.
UBS is predicting second-quarter profit before tax of US$4.6bn and a CET1 ratio – a measure of balance sheet strength – of 16.2%,
“Our interpretation of conference call guidance was that 2Q net interest income would likely be largely stable QoQ [quarter-on-quarter] as margin pressure lessens,” UBS said.
Net interest income is tipped to US$6.52bn and non-interest income US$6.13bn.
As with Standard Chartered, HSBC’s focus on Asia means that political considerations always lurk in the background.
“In many ways, HSBC remains the meat in the sandwich between China and Western politicians and regulators, who are taking a colder, harder line on Beijing’s policies, something which could yet make life hard for chairman Mark Tucker, CEO Noel Quinn and their team, as they cannot really afford to annoy the authorities in their most profitable Asian markets,” observed Russ Mould, the investment director at AJ Bell.
There is likely to be considerable interest in the dividend level as the bank is now free of the Bank of England looking over its shoulder and tutting at overly generous dividends.
The bank did not announce a quarterly dividend with its first-quarter results so it has a bit of catching up to do. For the full year, analysts are expecting a divi of 23 cents, up from 15 cents the year before.
Standard Chartered weighs in with second-quarter results on Tuesday, with the market expecting adjusted profit before tax of US$999mln.
Provisions for bad loans are expected to be around US$197mln, which represents a big improvement on US$611mln in the same quarter of last year.
Greggs serves up fresh results
With city centres opening back up after lockdown, half-year results from bakery chain Greggs PLC (LSE:GRG) on Tuesday will be eyed closely to ensure the chain is still on a roll and bringing home the bacon.
The firm’s most recent trading update in June showed that demand for sausage rolls, pasties and other pastries rebounded strongly as lockdown measures were eased, with sales at its stores 3% above 2019 levels.
With Greggs having said it expects sales to be back at pre-pandemic levels this year, the outlook will be eyed for any more details on forecasts, as well as any new features the company is planning to roll out to reach more customers following the success of its vegan products and delivery options.
Significant announcements on Tuesday August 3:
Trading announcements: BP PLC, AG Barr (LSE:BAG) PLC, Lamprell PLC (LSE:LAM, OTC:LMPRF)
Finals: Filtronic PLC (LSE:FTC), Joules Group PLC (AIM:JOUL), NWF Group PLC (AIM:NWF)
Interims: Standard Chartered PLC, Greggs PLC, Direct Line Insurance (LSE:DLG) Group PLC, Travis Perkins (LSE:TPK) PLC, Ultra Electronics (LSE:ULE) PLC, Aferian PLC, Coats Group PLC (LSE:COA), Keller Group (LSE:KLR) PLC, Rotork (LSE:ROR) PLC, Fresnillo PLC (LSE:FRES), Domino’s Pizza Group PLC, Weir Group (LSE:WEIR) PLC, TP ICAP (LSE:TCAP) PLC