Thursday preview: Shell Q1 reslults, JD Sports FY numbers eyed

(Sharecast News) - Thursday will bring first-quarter results from oil giant Shell, a trading and operations update from Harbour Energy and first-quarter earnings from McDonald's. Also on the UK corporate front, trading updates are due from Balfour Beatty, Hiscox and Metlen Energy & Metals, while Q1 results are due from Helios Towers and Lion Finance. JD Sports will release full-year numbers, while Rathbones will issue a Q1 statement.

As far as Shell is concerned, Richard Hunter, head of markets at Interactive Investor, said: "The recent BP numbers, where the group doubled its first quarter profit, has led to heightened expectations at Shell."

Hunter said investors will be looking for updates on trading, margins, and any production issues resulting from the Middle East conflict.

"There may also be some change to Shell's more recently conservative capital expenditure, where it had guided for a range of between $20 billion and $22 billion for this year," he said.

"Much as the oil companies highlight a low price at which it is against their interest to continue to drill, this can also kick in at the other end of the scale when extremely high prices can make it much less profitable - or even uneconomical - to continue to drill for more of the commodity. In the meantime, the group will go into the numbers with high expectations and shareholder returns in focus.

"Overall returns are currently boosted by a dividend yield of 3.3% as well as a multi-billion dollar share buyback programme, where Shell confirmed that the rate which is currently running at $3.5 billion per quarter will continue. Shareholders have also enjoyed a share price rally of 35% over the last 12 months, and of 20% in this year alone so far."

For sportswear retailer JD Sports, UBS said it expects investor focus to centre on any signs of slowing LFL sales growth in key European and US markets in fiscal Q1, and the level of promotional intensity across the wider sportswear sector, which could pressure the company to adopt a more aggressive promotional stance.

"With concerns around the pace of Nike's recovery and pressure on lower to middle income consumers, the current valuation implies sales growth and margins below historical averages," UBS said.