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Business Analysis & Features

The week ahead: Get ready for the big hitters: FTSE fields a team of all-stars

It's all about quality rather than quantity this week. There may not be a raft of announcements due, but with some of the market's biggest companies reporting, it will be a busy week.

It's all about quality rather than quantity this week. There may not be a raft of announcements due, but with some of the market's biggest companies reporting, it will be a busy week.

Oil giants Shell and BP both put out third-quarter numbers, and are expected to have benefited from the soaring price of crude. Analysts are hoping to up final forecasts for BP on the back of Tuesday's results. Williams de Broë's Richard Griffith is predicting net clean income to surge to a record $4.23bn (£2.31bn) from $2.87bn last year and commented in a recent note: "Scope for upward revisions to the full-year 2004 estimates is strong, as actual oil and gas prices are set to exceed our forecasts."

That is doubly good news for investors. BP, led by Lord Browne, has already unveiled around $5.5bn worth of buybacks so far in 2004, and with oil prices and profits now booming, analysts are predicting the programme could reach around $8bn for the full year. Exploration and production volumes are expected to rise by around 11 per cent.

Excluding Russian venture TNK-BP, however, production is likely to have fallen as a combination of planned maintenance and outages in the Gulf of Mexico during the hurricane season take their toll. Investors will also want an update on partnership talks with Russian gas monopoly Gazprom.

Another heavyweight due to report is GlaxoSmithKline. The City will be looking for robust sales from various key products, including asthma treatment Advair and blood pressure drug Coreg. It will also be the last set of results that suffers significantly from generic competition to antidepressant Paxil, which will contribute to a year-on-year drop of around 12 per cent, to £1.48bn, in pre-tax profits.

From drugs to chemicals, and ICI reports third-quarter numbers on the same day. Here the surging cost of crude could prove a problem as ICI's raw material prices shoot up. However, cost cutting and solid trading mean pre-tax profits are expected to nudge forward from £98m to around £110m.

Retail remains in the spotlight with Marks & Spencer revealing the results and strike price of its tender offer, and some well-trailed numbers due from Boots. The chemist chain and potential Ann Summers rival revealed earlier this month that it was drawing a line under its less-than-successful foray into services by selling its dentistry and eye-laser clinics.

It also warned that trading had been dented by stiff competition from supermarkets and the wet weather. Pre-tax profits are predicted to fall from £266m to around £210m.

So, with much of the bad news already out of the way, the focus at will be forward looking. The chain's Christmas campaign is under way and a strong festive showing will be vital.

Another company enduring well-publicised difficulties is Unilever, owner of Hellmann's mayonnaise, Magnum ice cream, Lipton tea, Slim-Fast and Domestos, among many others. The Anglo-Dutch giant has reported two consecutive quarters of disappointing sales growth and has been forced to abandon its double-digit earnings growth guidance for 2004. The expectation now is for low single-digit growth.

The tone of these latest results is likely to remain subdued, with trading continuing to be difficult, particularly in northern Europe, where pricing pressures from discount retailers are hitting home. The wet weather also hurt ice cream sales over the summer, and pre-tax profits are expected to fall from £7.65bn to around £7.14bn.

British American Tobacco also releases third-quarter numbers. The group has offloaded its US operation Brown & Williamson - and, crucially, its liabilities - via the subsidiary's merger with RJ Reynolds. But it remains a 42 per cent shareholder in the new company, so weak trading in North America and the Department of Justice trial against the industry, in which BAT is named as a co-defendant, are still focuses for investors. Currency fluctuations will have an impact on the numbers, and analysts are expecting flat profits before interest, tax and amortisation of around £775m.

From the media sector, the market will hear from advertising and marketing giant WPP, which produces an update on trading. It is unlikely to set the world alight, however. At the interims, chief executive Sir Martin Sorrell maintained a cautious outlook, and conditions are unlikely to have changed dramatically in the past three months. A review of the newly acquired Grey is also not expected until the full-year results.

The third-quarter earnings season in the States includes updates from controversial services group Halliburton, consumer goods giant Procter & Gamble and Budweiser owner Anheuser-Busch, the world's biggest brewer.

In continental Europe, meanwhile, there are numbers from Abbey National's new parent, Banco Santander Central Hispano, car manufacturers Volkswagen and Fiat, and sportswear specialist Puma.


Tomorrow 25

UK: Results: (interim) Alterian.

Tuesday 26

UK: Results: (final) Armour Group, Regent Inns; (I) Bristol & West Investments, Hitachi Capital UK, TTP Communications, Westbury; (first quarter) Surfcontrol; (third quarter) BP, British American Tobacco.

Wednesday 27

UK: Results: (I) Blueheath, Celsis International; (Q3) Unilever.

Thursday 28

UK: Results: (F) Formation Group; (I) Blacks Leisure Group, Boots, Chloride Group, Whitbread; (Q3) Amvescap. GlaxoSmithKline, ICI, Shell.

Friday 29

UK: Results: none scheduled.