With UK investors having developed a real taste for Wall Street investments in the past couple of years, it is unclear whether there will be more interest in the US earnings season than results from London-listed companies this week.
Tuesday may be a case in point, when Netflix Inc (NASDAQ:NFLX) unveils its third-quarter numbers (at 1pm Pacific Time or 9pm BST), with others there’s also Johnson & Johnson (NYSE:JNJ), Procter & Gamble (NYSE:PG), Philip Morris and Omnicom also reporting.
The most important figure for Netflix every quarter is subscriber growth, where the soaring success of its new hit show, Squid Game, may come too late in the period to have made much difference.
While the dystopian survival drama has been estimated to be worth nearly US$900mln to Netflix already, having attracted a record 111mln viewers around the world since going live, the South Korean show launched on 17 September, only two weeks before the end of the quarter.
In the second quarter, the video streaming group added 1.5mln new subscribers, which was more than expected but well down on the 4mln net additions in the first quarter and the 10.1mln from the year before.
For the third quarter, Netflix gave guidance for 3.5mln of net additions and earnings per share of US$2.55 a share, while the average analysts forecast is for 3.8mln net ‘adds’, US$7.48bn of revenue and EPS of US$2.57.
Investors might also be expecting to hear about progress in its move into video gaming and the Roald Dahl deal announced earlier this year.
Miners in focus
BHP Group PLC (LSE:BHP) will be the next of London’s giant miners to report in the coming week after the sector’s reporting season did not get off to the best start as Rio Tinto lowered guidance for its massive Pilbara operations in Western Australia.
Rio cited the tight labour market in Western Australia, which won’t concern Anglo American, focused as it is on Africa and Latin America, or Antofagasta, which is focused on Chile, but might be a concern for BHP.
All of the miners, however, will be feeling a warm glow from the meteoric rise in mineral prices in recent months.
Ringing the Bellway
A trading update indicated revenues of GBP3.1bn, a margin of around 17% and net cash of GBP330mln for the year to 31 July 2021.
Based on this, UBS expects a profit before tax and exceptional items of GBP533mln (reported GBP500mln post cladding provisions) and underlying EPS of 350p.
For the new financial year, the broker expects 7.7% volume growth, lower average selling prices and margins to improve to 18%, resulting in a pre-ex PBT of GBP579mln.
Raw material availability and inflation are the areas of possible concern, but rival Barratt has already primed the market for good news with its recent bullish AGM statement and it will be a surprise if Bellway is not similarly optimistic.
Major announcements on Tuesday 19 October:
Interims: BP Marsh & Partners PLC
AGMs: McBride PLC