BP Share News (BP.)

It is just over a year since the Gulf of Mexico Macondo oil well tragedy, an event that will continue to loom large over oil colossus BP when it announces its first quarter results on what is a busy Wednesday for company results.However, recent events in Russia are likely to be more to the forefront of investors' minds, as well as the progress of the group's $30bn divestment programme.With all that going on it is easy to forget that the company's basic business is extracting oil and gas from the earth. Analyst Tony Shepard at broker Charles Stanley thinks first quarter production volumes could be down some 7% on a year earlier, "and as a result, BP will have less leverage from higher oil prices which are some 32% higher than a year ago.""Exploration & Production (E&P) profit may be similar to last year's level of $8.1bn," Shepard continued. "We expect a stronger performance from the downstream operations on the back of better indicated refining margins and efficiencies which could drive a profit of $1.5bn compared to $0.8bn a year ago. The quarterly dividend was reinstated in Q4 [fourth quarter] at a level of 7 cents per share and we expect this to be maintained through the year."For the group as a whole, Charles Stanley is predicting first quarter adjusted net income of $5.7bn, up from $5.6bn a year earlier.Last year could justifiably be described as an annus horribilis for BP in which it suffered its fair share of public outrage. Banking giant Barclays has borne the brunt of public outrage itself, and its interim management statement covering the first quarter is sure to garner some acidic press coverage outside of the City pages. Nomura Securities thinks the figures are likely to be down on last year, which may temper the press's ire, with the period unlikely to have been a vintage quarter for BarCap, the bank's investment banking arm."We assume BarCap profits of £1.2bn, down from £ 1.6bn the previous year. This includes a top-line income of £3.3bn, 13% lower than in Q1 last year. It also compares with £3.4bn in Q4, which benefited from non-recurring gains, we estimated to have been c. £300m, if apportioned according to risk assets," the Japanese broker said."We have assumed a continuation of the recovery in traditional banking profitability, but at a slower pace than last year. We assume Barclays Global Retail Bank contributes profit before tax of £537m, against £303m in Q1 last year. We also assume UK & Ireland profits of £243m up from £158m last year. However, across other commercial banking markets and especially in Spain, we expect losses to continue," the broker added.Out the same day are trading statements from chip designers ARM Holdings and Wolfson Microelectronics.Matrix group is bearish on ARM after its strong run over the last year, and thinks the market is overestimating the Cambridge firm's growth opportunities."We see revenues of £108.2m, adjusted operating profit of £44.9m (41.5% margin) and earnings per share (EPS) of 2.48p. Our estimates are broadly in line with consensus expectations (2.53p). We see clean OPEX [operational expenditure] of £57.2m, slightly lower than consensus," Matrix said.As for any fall-out from the Japanese earthquake, Matrix notes that: "ARM royalty revenues are recognised one quarter in arrears; any disruption in semiconductor shipments in Q2 2011 linked to recent events in Japan would not appear before Q3 2011. We do not think that licensing revenues, which historically have been quite lumpy, will suffer."The same broker is more upbeat about ARM's Scottish rival Wolfson Microelectronics, which it thinks is on the right track. "With 2009 and 2010 design wins ramping up to full production in 2011, we feel that the pipeline is very strong, in both smartphones and other applications such as TVs, tablets and game consoles. The only risk we see comes from the impact of the Japanese earthquake: any supply chain disruption will of course affect Wolfson's revenue and guidance.Matrix is forecasting first quarter revenues of $41.2m, slightly above the market consensus of $41.0m. It is below consensus on underlying operating profit, however, going for $0.2m, half the level the market is expecting. Underlying EPS is tipped to be 98 cents.One of the key issues in the trading statement could be the company's exposure to problems in Japan caused by March's earthquake and subsequent tsunami."There is still little clarity on how deeply the Japanese disaster will affect Wolfson. While the company's direct exposure to Japan is expected at 10-15% in 2011, not all customers' production facilities were affected, so the real impact will likely be smaller. The indirect effect, through wireless components shortages, is harder to assess and depends, among others things, on current inventory levels," Matrix believes. Primark and British Sugar owner Associated British Foods is another Footsie heavyweight that will be clamouring for attention on 27 April, and could see a continuation of the transfer in emphasis away from Primark to British Sugar as the main driver of growth in the short term."The depressed consumer environment in the UK has taken its toll on Primark's sales growth, with like for likes slipping to 2% in recent months, while margins remain under pressure from the rising cotton price. Sugar, by contrast, is doing better than expected despite the impact of the poor UK beet crop, with Spain and China performing strongly thanks to the tightness of global supply. Grocery has been held back by a disappointing Australian performance," broker RBS Hoare Govett said.The broker is not expecting Wednesday's trading statement to prompt a change in full year forecasts. It thinks management may focus attention on the potential profits windfall in 2012 from the sharp increase in European Union sugar prices in the event that it has better volumes from a normal beet crop. "This may push consensus EPS forecasts higher, though the continued pressure on Primark margins from high cotton prices remains a concern," RBS Hoare Govett concluded.Charles Stanley, meanwhile, thinks AB Foods will announce interim sales of £5.16bn, up from £4.73bn a year earlier, and earnings per share of 32.3p, up from 30.5p."Investor interest is likely to centre on the Primark retail chain where visibility regarding the outlook is cloudy and sentiment negative both in the context of a difficult environment for UK discretionary spending and given the difficult backdrop for input costs which are likely to have risen," writes the broker's head of investment research, Jeremy Batstone-Carr. "We have been wary regarding prospects for this business (c.27% total group sales, 35% group operating profit) for some time and suspect that margins are unlikely to revive in the near future. What AB Foods has to say regarding prospects for this business is likely to determine sentiment towards the shares in the immediate aftermath of the results' release," the broker reckons.Batstone-Carr thinks Primark's reported sales will be up by around 10% year on year, with like for like sales growth running at about 3%."With regard to the outlook we expect AB Foods to remain cautious but to continue to guide for higher earnings over the fiscal year. The extent of that profit growth is likely to be fairly subdued in our view, a reflection of rising cost pressures. We expect to have to lower estimates again in the wake of these results," Charles Stanley said.First quarter sales from pharmaceuticals leviathan GlaxoSmithKline (GSK) this time round will not benefit from the swine flu scare that was gripping public attention in the first three months of 2010."We expect pharmaceutical division sales to be £5.35bn (Q1 2010: £6.126bn, a decline of 14%) and consumer healthcare sales of £1.31bn (growth of 7%). This will broadly lead to a top line decline of 10%, compounded by the fact that GSK generated £782m of H1N1 pandemic vaccine and Relenza sales in Q1 2010, which will not be repeated," says Navid Malik of Matrix Group."The pipeline story for GSK remains key. The company has already flagged updates of 15 phase III assets before the end of 2012, we expect GSK to provide further updates on its pipeline," the broker added.House broker BarCap also notes Glaxo is going up against a tough comparative period "with £1.1bn pandemic, Avandia and Valtrex sales in 1Q10 [first quarter 2010]". It forecasts underlying sales growth in constant currencies of about 5%, in line with the full year 2010 performance."By 3Q11 we expect much cleaner comparisons with underlying sales moving close to reported sales growth. These issues may [have an] impact [on] quarterly margins with the chief executive officer at full year 2010 results saying that quarter to quarter margins are going to be a bit all over the place," BarCap added.The broker thinks an improved first quarter dividend of 16p may be in the offing, up from 15p last year. On the economic front, the major event is the meeting of the Federal Open Market Committee (FOMC), the US central bank's interest rate setting committee."We expect the FOMC to leave its asset purchase programme unchanged yet send a signal that the programme will end in June. We expect the reinvestment policy to be left in place and the chairman, during his press conference, to give guidance on the status of this policy after the purchase programme ends," Barclays Capital said.Of more parochial interest will be the preliminary estimate of UK gross domestic product in the first quarter. The consensus view is that we will see a 0.5% quarter on quarter increase. INTERIMSAssociated British Foods, FennerQUARTERLY EX-DIVIDEND DATEEquity Partnership Inv Co Income SharesINTERNATIONAL ECONOMIC ANNOUNCEMENTSRetail Sales (JPN)Small Business Confidence (JPN)GfK Consumer Confidence (GER) (07:00)Consumer Confidence Indicator (FRA) (07:45)Consumer Prices Index Industrial (GER) New Orders (EU) (10:00)MBA Mortgage Applications (US) (12:00)Durable Goods Orders (US) (13:30)Crude Oil Inventories (US) (15:30)FOMC Interest Rate (US) (17:15)GMSChina Wonder Ltd.FINALSGame Group, PraesepeIMSSAggreko, Barclays, GlobeOp Financial Services SA (DI), Premier FoodsAGMS4imprint Group, Aggreko, Athelney Trust, Barclays, Bodycote, DP Poland, Edinburgh UK Tracker Trust, JPMorgan US Smaller Companies Inv Trust, Premier Energy & Water Trust, Stanley Gibbons GroupTRADING ANNOUNCEMENTSCarpetrightUK ECONOMIC ANNOUNCEMENTSBBA Mortgage Lending Figures (09:30)GDP (Preliminary) (09:30)Index of Services (09:30)FINAL DIVIDEND PAYMENT DATELSL Property ServicesFINAL EX-DIVIDEND DATEAfrican Barrick Gold , ARM Holdings, Autoclenz Holdings, Centrica, Croda International, Dragon Oil, Drax Group, Edinburgh US Tracker Trust, Ferrexpo, Fresnillo, H.R. Owen, Henry Boot, Hydro International, IS Solutions, Lupus Capital, Playtech Ltd., Rathbone Brothers, Smith & Nephew, Tesco, Total ProduceQ1ARM Holdings, BP, GlaxoSmithKline, Wolfson Microelectronics---jh