Week ahead: Vodafone, BT and Burberry earnings in focus as crucial US inflation reading looms
Earnings from Vodafone, BT and Burberry take centre stage in the City’s corporate diary this week, alongside a crucial inflation reading across the pond that could put the brakes on the FTSE 100’s record rally.
Vodafone is due to report its full-year earnings on Tuesday. Since becoming chief executive last January, Margherita Della Valle has launched a major restructuring to turnaround the FTSE 100 telecoms firm and improve its share price.
The turnaround plan has seen Vodafone try to merge its assets with Chinese-owned Three and sell both its Italian and Spanish businesses.
“Such dramatic surgery is a welcome admission that the firm is (or was) fighting on too many fronts in too many markets, especially given its net debt position,” said analysts at AJ Bell.
“The cash inflows will reduce borrowing, which is welcome, although the disposals mean the full-year results will be trickier to read than normal.”
Investors will be looking for more information on the timing of the two sales, as well as any updates on the Competition and Markets Authority’s investigation into Vodafone’s tie-up with Three.
On Wednesday, luxury goods giant Burberry will post its full-year earnings. The firm’s shares are down 16 per cent this year after it slashed its profit guidance in January in response to a slowdown in demand for luxury purchases.
Its earnings will shed light on London’s attractiveness as a destination for high-end shopping compared with the likes of Paris and Milan.
Burberry has blamed the cutting of VAT-free shopping for international tourists for its poor performance in the UK in recent times.
BT is due to report its full-year earnings on Thursday. Investors will look for clues on chief executive Allison Kirkby’s long-term vision for the company. Kirkby took the helm in February to become BT’s first ever female CEO.
BT is trying to streamline its operations as it continues to build full-fibre and 5G networks in the UK, while undergoing a radical cost-cutting programme launched by former boss Philip Jansen. It plans to slash up to 55,000 jobs by 2030 – more than 40 per cent of its total global workforce.
One of Kirkby’s main tasks is fending off growing competition from “altnet” rivals. In February, the firm said it would miss an initial target of 400,000 line losses in its current financial year.
Travel giant easyJet will also report its earnings on Thursday.
The FTSE 100 has closed at a record high for six sessions straight amid a global stock market rally fuelled by renewed optimism around interest rate cuts from major central banks.
However, this confidence is set to be tested on Wednesday with the latest US consumer price index release.
Economists polled by Reuters expect the inflation report will show an increase of 0.3 per cent in April from the previous month.
In this case, an uptick in inflation would bolster the case for the US Federal Reserve, considered a heavy influence on other central banks, to wait until July or later to start cutting interest rates.