Continuing momentum expected at BP and Shell as they ready first quarter updates

Oil majors’ commitment to energy transition and impact of windfall taxes will be in focus

The OPEC production cuts which helped drive a recent rally in oil prices will have come too late to be reflected in upcoming quarterly earnings numbers from BP (BP.) and Shell (SHEL), published on 2 and 4 May respectively, but investor expectations will still be pitched high.

Strong earnings are a double-edged sword as they will be welcomed by the market but will create further pressure for these to be taxed.

Shell teased its results in some detail on 6 April so there are unlikely to be too many surprises. For BP there may be interest in how the new strategy announced alongside its fourth quarter 2022 results
is being implemented. The company has scaled back plans to reduce
oil and gas production.

Berenberg analyst Henry Tarr flags some of the key questions investors will be asking. He says: ‘Where is the additional capex announced at Q4 being spent? How much of it is linked to rising inflation versus new activity? Is the company experiencing higher tax rates across different countries through windfall taxes?’

Tarr adds that attention will likely be focused on the extent to which BP favours dividends or share buybacks when determining shareholder returns. He expects a cash return from BP of around 14% in dividends and buybacks for 2023.

What to expect from Apple’s second quarter results on 4 May

The market will be hoping for a better trading period than its first quarter decline

Consumer electronics giant Apple (APPL) reports its second quarter earnings on 4 May with expectations set at subdued levels. Group earnings are forecast to be lower year-on-year as the company battles a difficult macro-economic backdrop.

In February the company posted its first annual drop in quarterly revenue for three-and-a-half years thanks to supply chain disruptions in China. There will be hopes of an improvement on this front in the latest period thanks to the lifting of Covid restrictions in the world’s second largest economy, also an important market for Apple.

There will be a focus on the company’s new tie-up with Goldman Sachs (GS:NYSE), which is offering a competitive rate on a freshly launched savings product only available to customers with an Apple credit card. Being a bigger playing in the money channel could add another string to Apple’s bow.

Services are an increasingly important part of the Apple story, as it derives repeatable and predictable revenue from an installed base of more than two billion handsets. Its current offering includes Apple TV, iTunes, the App Store and Apple Pay. Revenue from this area has been growing fast, nearly doubling from $10.9 billion in the final three months of 2018 to $20.8 billion in the final three months of 2022.

UK UPDATES OVER THE NEXT 7 DAYS

FULL-YEAR RESULTS

April 28: Morgan Advanced Materials, PureTech Health, Fisher (James) & Sons

May 2: Facilities by ADF

May 3: Cambridge Cognition, Inspiration Healthcare

May 4: Trainline

INTERIMS

May 3: Ten Lifestyle Group, Smiths News

TRADING UPDATES

April 28: Computacenter, Industrials Reit Limited, Smurfit Kappa, Rotork

May 3: OSB Group, Flutter Entertainment, TI Fluid Systems, Barratt Developments

May 4: Derwent London, Mondi, Morgan Sindall, Next

FIRST QUARTER RESULTS

April 28: NatWest

May 2:  BP

May 4: Wheaton Precious Metals, Endeavour Mining, Shell

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

April 28: Exxon Mobil, Chevron, Daimler, Aon, Colgate-Palmolive, Sega Sammy, WisdomTree

May 1: Stryker, Vertex, Southern Copper, Arista Networks, MGM, Everest, Expedia

May 2: Pfizer, AMD, Starbucks, Uber Tech, Thomson Reuters, Marathon Petroleum, Marriott International, Ford Motor

May 3: Estee Lauder, Kraft Heinz, MetLife, Phillips 66, Yum! Brands, Flutter Entertainment, Barrick Gold, Wolters Kluwer, Albermarle, Garmin, Spire, Tripadvisor,

May 4: Apple, Novo Nordisk, Anheuser Busch, ConocoPhillips, Shopify, Motorola, Infineon, AIG, Carlyle Group, News Corp

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