You may think that Autonomy, the Cambridge-based software developer which is due to report full-year results on Tuesday, is just another search company, similar to Google or MSN. Yet there is more to the company's "meaning-based computing" technology than meets the eye. Its products can dig deep into stacks of vast, unorganised, unmanaged data to find a particular document, or a set of documents, based on the preponderance of one pattern over another. Put another way, Autonomy helps its customers to manage sheaves of data on the fly, without the need for meticulous labelling. The technology appeals to both large corporations and governments, which use Autonomy products in areas such as policing and counter-terrorism.
Panmure Gordon is also keen on the company. The analyst George O'Connor expects a strong set of results tomorrow, anticipating sales of $340.8m (£171.8m), up from $247.5m last year. "In our view, Autonomy is looking at an accelerating demand environment as IDOL [the company's main offering] has entered the 'Growth' phase," he said. "By this all software products pass through four states: introduction, growth, maturity and decline. In our view, Autonomy is on the accelerated growth stage."
Mr O'Connor also said that while the acquisition of Fast Search & Transfer, a smaller software developer which was snapped up by Microsoft recently, may create competitive issues at the "maturity" stage, for now, in the growth stage (when the product has been accepted by the market and sales increase substantially) it removes a competitor. As Mr O'Connor put it, the company is "a gorilla" in its target market.
Today: Results: None.
Tomorrow: Prudential will post its new business figures. Analysts at UBS are forecasting full-year life insurance sales to improve by 15 per cent to £2.85bn on an APE basis. Volumes in Asia are also expected to rise, by 35 per cent, to £1.29bn. Lehman Brothers thinks that the company's industry-leading Asian franchise, while still undervalued, "sets it apart from its peer group". "Prudential now derives 50 per cent of new business profits and over 25 per cent of embedded value from its Asianoperations – proportions that are the highest of any European insurer and which we believe will only increase with time," Lehman analysts said, adding: "As such, we expect Prudential to be valued increasingly with reference to Asian peers rather than European ones."
According to them, and happily for investors, a sum-of-the-parts valuation of Prudential Asia, using locally traded companies as a comparison, "gives a valuation of Prudential over 50 per cent above the current share price".
Results/updates: Prudential, Autonomy, Severn Trent
Wednesday: Results/updates: Thomas Cook Group, Standard Life (new business sales announcement)
Thursday: The energy giant Royal Dutch Shell will post fourth-quarter results on Thursday. UBS is forecasting net income on a current cost basis of $5.876bn, above the consensus figure of $5.826bn. That is a rise of 7 per cent year-on-year, but 4 per cent down sequentially. "Shell has developed a strong track record in its quarterly earnings since 2005," the UBS analyst Jon Rigby said in a note last week, "but this quarter has seen further deteriorations in the downstream and chemicals markets which counterbalance stronger upstream conditions and the seasonal volume pick up."
Also on Thursday, Vodafone will issue an interim management statement for the quarter to the end of December 2007. Consensus forecasts expect organic service revenue to reach around 1.5 per cent in Europe and 13 per cent in EMAPA. Overall service growth is forecast to be between 3.5 and 4 per cent, compared with 4.9 per cent in the previous quarter.
Laura Janssens at UBS says that while Germany may show some improvement on last quarter's negative service revenue growth and Italy should show stable local currency growth, Spain, after reporting an 8 per cent decline in the previous quarter, might show a "further sharp decline in service revenue growth".
Following rival insurers Prudential on Tuesday and Standard Life on Wednesday, Friends Provident will reveal its new business figures just before the week ends. In addition, investors will be awaiting results of the company's strategic review. Lehman says: "Other than revealing that it has already agreed to sell the company, we find it difficult to see how the review could reveal anything significantly positive, and could even lead to further downside." Friends is currently without a chief executive. The Lehman analysts add: "If the company decides to go on with a new CEO, that person will be incentivised to get any future potential 'bad news' out now (eg write-down of persistency assumptions, a cut inthe dividend)."
Results/updates: Royal Dutch Shell, Vodafone,AstraZeneca, WH Smith.
Friday: British Airways will post third-quarter results at the end of the week. UBS estimates earnings before interestand tax at £176m, just below the consensus of £179m. The analyst Tim Marshall thinks that the companyis "well hedged" againstthe high price of oil in the third and the fourth quarter, "so risk on earnings will come from the revenue/demand environment".Reuse content