Another day, another bank reporting results - Barclays the next up to the oche

By Jon Hopkins / February 21, 2018 / www.proactiveinvestors.co.uk / Article Link

Another day, another bank reporting results, with Barclays PLC (LON:BARC) the latest the post its full-year results on Thursday.

Like its peer, the FTSE 100-listed lender is facing some large exceptional items which are going to drag down its reported profits for 2017, one of which is a ?1bn charge to profits thanks to President Trump's US tax reforms.

However, that charge does mean in the meantime Barclays will need to write down an estimated ?1bn of its US deferred tax assets, a bit of accounting jiggery pokery which will reduce reported profits but doesn't really tell us anything about Barclays in the real world.

Like Lloyds, Barclays may also face further PPI charges, with PPI costs for 2017 to come to at least ?700mln, taking Barclays' total PPI bill to ?9.1bn.

US tax changes the focus for BAT after expansion

British American Tobacco plc's (LON:BATS) quarterly results on Thursday should also reveal more details on how the recent tax changes in the US are likely to affect the cigarette manufacturer, and comments on the steady increase in regulation of tobacco products will also be interesting.

In December, the cigarette manufacturer said it was performing well with trading in line with the cigarette maker's expectations and its markets in Canada, Germany, Romania, Bangladesh and Ukraine were performing well, but condition in Russia, the Gulf states, Brazil, South Africa and Malaysia remained challenging.

In January the FTSE-100 listed firm said that the announced tax changes will have no impact on its underlying effective tax rate, saying it anticipates that the changes will result in a non-cash exceptional tax credit as a result of the revaluation of deferred tax balances arising from the acquisition of Reynolds American Inc.

Centrica outlook crucial as investors brace for bad news

Previewing 2017 results from Centrica PLC (LON:CNA), Deutsche Bank repeated a 'sell' recommendation with a 125p price target linked to the British Gas owner's November profit warning.

With the warning priming investors for bad news, its analysts reckon the market will be looking closely at the future outlook - and expectations are not positive.

They said: "The outlook for group earnings may be heavily dependent on the level chosen by regulator Ofgem for the full standard variable tari??EUR cap, due to be implemented later this year once legislation is in place."

City has mixed expectations for BAE Systems

'Headwinds' for BAE Systems PLCs (LON:BA.) fighter jet related business is expected to offset positive momentum from the defence and engineering group's American operations in 2018.

However, online equity dealer The Share Centre thinks there are positive expectations for Thursday's 2017 numbers where the market believes revenues grew to ?19.6bn, up by roughly 10% while reported profits are expected to breach ?1bn for the first time since 2012 after a difficult number of years following government budget deficits.

In a preview notes, its analysts said: "Trading from the US and Middle East are expected to have been good and management should reaffirm these views for 2018."

Significant events expected on Thursday February 22:

Finals: Anglo American PLC (LON:AAL), BAE Systems PLC (LON:BA.), Barclays PLC (LON:BARC), British American Tobacco PLC (LON:BATS), Centrica PLC (LON:CAN), RSA Insurance PLC (LON:RSA), Intu Properties PLC (LON:INTU), KAZ Minerals PLC (LON:KAZ), Macfarlane Group PLC (LON:MACF), Morgan Sindall Group PLC (LON:MGNS), Playtech PLC (LON:PTEC), Rathbone Brothers PLC (LON:RAT), Vitec Group PLC (LON:VTC)

Interims: Go-Ahead Group PLC (LON:HOG), Hays plc (LON:HAS), Wilmington PLC (LON:WIL)

Trading update: Hansard Global PLC (LON:HSD), Safestore Holdings PLC (Q1) (LON:SAFE)

Ex-dividends: To knock 9.1 points off FTSE 100 index - Carnival PLC (LON:CCL), Diageo plc (LON:DGE), GlaxoSmithKline plc (LON:GSK), Imperial Brands PLC (LON:IMB)

Economic data: UK second reading Q4 GDP; US weekly jobless claims

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