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(Alliance News) - Stock prices in London are seen opening slightly higher on Tuesday as the US Federal Reserve's latest monetary policy meeting gets underway.

In early UK company news, consumer goods firm Unilever reported a rise in first half revenue. Jet engine maker Rolls-Royce named its new CEO. Contract caterer Compass raised its annual organic revenue growth guidance.

The US central bank continues to ramp up borrowing costs, with another 75 basis point lift expected on Wednesday, and more before the end of the year.

Several officials at the Fed, including Chair Jerome Powell, have suggested they are determined to bring US inflation down from four-decade highs, even at the expense of economic growth.

IG futures indicate the FTSE 100 index is to open 8.50 points higher at 7,314.80. The index closed up 29.93 points, or 0.4%, at 7,306.30 Monday.

Unilever said it delivered a first half performance that builds on the momentum of 2021, despite challenges posed by high inflation and slower global growth.

The Dove soap maker highlighted that high input cost inflation has been "widespread" across its markets, and it is expected to remain elevated in the second half.

For the six months to June 30, revenue was EUR29.62 billion, up 15% from EUR25.79 billion last year.

Unilever posted first-half pretax profit of EUR4.359 billion, down 0.2% from EUR4.369 billion a year before.

Operating profit was EUR4.5 billion, up 1.7% from EUR4.4 billion. Underlying operating profit growth was 4.1%. Operating profit margin was 15.2% in the first half, down by two percentage points from a year before, though underlying operating profit margin was 17.0%.

Unilever said it generated underlying sales growth of 8.1% in the first half as it raised prices to counter rising costs and slumping volumes.

The company declared a EUR0.4268 quarterly dividend.

Looking ahead, Unilever expects 2022 underlying sales growth to be above its previous 4.5% to 6.5% guidance range. The Ben & Jerry's ice cream maker had previously forecast full-year underlying sales growth at the top end of a range of 4.5% to 6.5%.

"The medium-term macroeconomic and cost inflation outlooks are uncertain and volatile, but delivering growth remains our first priority. Against this backdrop, we continue to expect to improve margin in 2023 and 2024, through pricing, mix and savings," Unilever added.

Jet engine maker Rolls-Royce has hired former BP executive Tufan Erginbilgic as its new chief executive officer.

Erginbilgic will take up his new role on January 1, succeeding Warren East who had previously announced his intention to step down at the end of this year.

In his last role before leaving in 2020, Erginbilgic led BP's downstream business, which included Refining, Petrochemicals, Service Station Network, Lubricants, Midstream operations and the Air BP jet fuel operation.

Contract caterer Compass Group said the strong growth momentum seen throughout the first half of the year continued into the third quarter, with all three of its geographic regions operating above 2019 levels.

For the three months to June 30, Compass said underlying revenue was up 109%. North American revenue was up 112%, while revenue from Europe and the rest of the world were 104% and 106% stronger, respectively.

Compass said new business growth continued to accelerate, benefiting from an increase in first time outsourcing due to ongoing operational challenges and heightened inflation.

Looking ahead, Compass raised its 2022 organic revenue growth guidance to around 35% from around 30%. It also confirmed financial 2022 operating margin guidance of over 6% and now expects exit margin to "moderate slightly" from around 7% due to the strong net new performance and ongoing inflationary pressures.

"While we are mindful of the challenging macroeconomic environment, we remain excited about the significant structural growth opportunities globally. With a clear strategy, operational scale, and market leading offer, Compass is very well positioned to capitalise on the increase in outsourcing opportunities. Longer term, we expect revenue and profit growth above historical rates, returning margin to pre-pandemic levels, and rewarding shareholders with further returns," the company said.

New York ended mostly higher on Monday. The Dow Jones Industrial Average closed up 0.3% and the S&P 500 up 0.1%, but the Nasdaq Composite lost 0.4%.

Big-box retailer Walmart on Monday said its annual profit will be weaker than expected as rampant food inflation means consumers are doing less general merchandise spending.

Second quarter sales will top expectations, though the top-line will be boosted by lower margin offerings, such as food. For its second quarter, which concludes on Sunday, Walmart expects comparative sales in the US to rise 6% annually, excluding fuel.

Consolidated net sales for the quarter are expected to rise 7.5% yearly. For the full-year, Walmart expects growth of 4.5%. Excluding disposals, annual sales are to rise 5.5%, Walmart said.

There will be a double-digit profit fall, however, Walmart said. Operating income for the second quarter will decline 13% to 14%. For the full-year, it will slump 11% to 13%.

The stock dropped 9.9% in after-hours trade in New York.

"The Walmart results also saw Amazon and Target stocks get a beating by association and re-energised recession nerves. That sentiment has carried over into Asian markets today, which are also having a modestly mixed day, erring towards the downside," said Oanda Markets analyst Jeffery Halley.

Amazon lost 3.9% in the after-hours session, while Target shed 5.1%.

In the US earnings calendar Tuesday, Alphabet and Microsoft, 3M, Coca-Cola, General Motors, Texas Instruments and Visa all release second-quarter results.

In Asia on Tuesday, the Nikkei 225 index in Tokyo closed down 0.2%. In China, the Shanghai Composite was up 0.7%, while the Hang Seng index in Hong Kong was up 1.7%. The S&P/ASX 200 in Sydney ended 0.3% higher.

The pound was quoted at USD1.2060 early Tuesday, up from USD1.2041 at the London equities close Monday.

The euro was priced at USD1.0223, up from USD1.0215. Against the Japanese yen, the dollar was quoted at JPY136.56, lower against JPY136.71.

Brent oil was quoted at USD106.85 a barrel Tuesday morning, up from USD104.78 at the close Monday. Gold stood at USD1,723.58 an ounce, higher against USD1,718.56.

A light economic events calendar on Tuesday has US Richmond Fed business activity survey and new residential sales at 1500 BST.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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