Looks like investors have quite the entertaining week planned! The likes of easyJet, BT Group, Home Depot and Target will be giving their latest trading updates next week. As these firms prepare to start reporting their Q3 earnings, analysts are looking them over with bated breath. Beyond determining the direction of markets, their results will provide telling clues about wider macroeconomic developments.
European low-cost airline easyJet, meanwhile, announced a £61 million headline loss for January. This is a positive step, up from the £126 million loss seen in the same quarter last year. The firm maintained its guidance for the full year. At that level, they forecast a consolidated group adjusted EBITDA of €11 billion and a consolidated group adjusted free cash flow of €2.4 billion. Despite beating the airline’s revenue estimates, they’re still about $1 billion under what the airline brought in at this time last year. In light of these factors, easyJet’s profit figures beat expectations.
EasyJet’s new CEO is impatient to right the balance sheet. Added to this, the company has recently been anticipating a full fiscal-year 25%-plus growth rate in customer holiday bookings for the back half of the fiscal year. This optimism would point to a strong rebound in travel demand once that consumer confidence is fully rebuilt.
BT Group has had incredible share performance over the last year, with shares increasing by more than 75 percent. The telecommunications telecom giant is on the move! In the third quarter, it increased its Openreach fibre deployment target by 1 million premises to its fibre-to-the-premises (FTTP) build rate. The overall milestone of all connected premises has recently passed the 17 million mark. BT Group is on track to reach those 25 million by the end of next year! This continued commitment to infrastructure investment has placed BT Group in a strong competitive position within a rapidly consolidating market.
In the retail sector, Home Depot has recently ended a run of eight quarters with falling comparable sales. They stunned with record earnings of $2.41 per share. Perhaps this rapid reversal reflects a broader pattern in consumer spending, with home improvement projects coming back strong as the pandemic-altered economy moves in that direction.
Target had been expecting 1% same-store sales growth for the next quarter. This was below the 2.6% consensus estimate. The retailer’s expected earnings are projected at $1.71 per share. This pretty mild forecast begs the question—with consumers supported by changing conditions in the economy, what will they do?
And last week, U.K.-based retailers Sainsbury and Tesco both announced good earnings news. Their success gives us all confidence that the grocery sector is a solid place to be. In other news, Next PLC has had a very healthy first quarter. At the same time, Wickes proved its own resilience with a strong trading performance.
These companies are already preparing to report their third quarter earnings. The market will be watching very closely how all of this will change future directions and affect investor sentiment. One unfortunate result may be to highlight just how badly each company does on their own. Equally important, they’ll shed light on the overall economic situation as the private sector navigates a tough environment.