The Week Ahead: The City's wheels are oiled and drugs keep the traders buzzing

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The Independent Online

It may be half-term this week, but the City will have to wait a little longer for its time off. In the next few days some of the stock market's biggest companies post third-quarter numbers, including BP, Royal Dutch Shell and drugs giants GlaxoSmithKline and AstraZeneca. Between them, these four companies - all ranked in the FTSE 100's top 10 - have a market value of £374bn.

For BP and chief executive Lord Browne, it has been a turbulent year. There have been oil spills in Alaska, further delays to the launch of its Thunder Horse platform in the Gulf of Mexico and the legal fallout from the Texas refinery explosion, which killed 15 people.

At the results, analysts are predicting another quarter where BP shows, according to Lehman Brothers, "lower than average earnings momentum". Most believe net income will fall to around $4.9bn (£2.6bn) from the $5.3bn notched up during the same period last year.

At rival Shell, investors will want an update on how the Sakhalin 2 project is faring, after the Russian authorities voiced environmental concerns about the field - which most took as further evidence that Russia is asserting greater control over natural resources.

Staying with resources, mining giant BHP Billiton is likely to show how the strength of the commodity markets is boosting its bottom line when it provides an update on trading.

As for pharmaceuticals, one of the City's biggest concerns is the lack of new, potentially blockbuster drugs in the pipeline. But that is not to say everyone is taking a negative stance. Broker Charles Stanley has a "buy" recommendation on AstraZeneca, and says of the upcoming numbers: "The group continues to benefit from strength in its core blockbuster portfolio, including Nexium, Seroquel and Crestor.

"AstraZeneca has an aggressive near-term earnings growth forecast based, largely, on cost-cutting and share buybacks." Indeed, several analysts are expecting the company to increase projections for the rest of the year.

At GlaxoSmithKline, pre-tax profits are expected to rise from £1.75bn last year to £1.77bn.

Fellow blue-chip drugs group Shire is also reporting third-quarter figures, as is Reckitt Benckiser, the owner of Veet, Vanish and Harpic. Investors will want to hear more on BHI, the owner of Nurofen that Reckitt acquired at the start of this year from Alliance Boots.

Drugs and oil don't have the only big names updating the City. Media giant WPP will give investors an insight into trading, and investors will be hoping that head honcho Sir Martin Sorrell has some upbeat words on the advertising market.

British American Tobacco, meanwhile, is expected to reveal a rise in profits for the nine months to the end of September, from £2.1bn in 2005 to £2.2bn. Analysts will be looking for an update on the company's drive to reduce costs, and for more good news from growing markets outside Western Europe.

From one guilty pleasure to another: Cadbury Schweppes is giving an update on trading. Management is set to confirm an improving performance, driven by a strong showing in the US.

Retail will also be represented with final results from Debenhams, the department store group taken private in 2003, only to be relisted this year. With competition hotting up from the likes of John Lewis and a revamped Marks & Spencer, however, the news from Debenhams may not be great.

Elsewhere, leisure group Whitbread publishes interim numbers. The company has sold off a number of underperforming pubs this year, and investors will be looking for an update on what else could go. Says Charles Stanley: "Investors are likely to want information on TGI Friday's, which may also be on the chopping block, Costa Coffee, Premier Travel Inns and David Lloyd Leisure - which continue to trade strongly."

It also promises to be a busy week overseas, with results due in the US from American Express, Ford, Kraft Foods, Halliburton and Kimberly-Clark, to name but a few. Following the sterling performance of the Dow Jones last week, when the index pushed on to fresh highs, investors will be hoping for more good news.

As for economic news, the US Federal Reserve is expected to leave interest rates on hold, while in mainland Europe, traders will hear from German drugs groups Schering and Merck, as well as DaimlerChrysler, Volkswagen, Fiat and Swedish Match, the Scandinavian tobacco and lighter group.

Domestic economic news will be taken up with the CBI's Industrial Trends survey.

CALENDAR

Tomorrow 23

UK RESULTS: (final) Tristel.

Tuesday 24

UK RESULTS: (F) Debenhams, Debts.co.uk; (interim) Whitbread; (third quarter) Autonomy, BP, Reckitt Benckiser, Wolfson Microelectronics.

Wednesday 25

UK RESULTS: None scheduled.

Thursday 26

UK RESULTS: (I) Blacks Leisure; (Q3) Amvescap, AstraZeneca, British American Tobacco, Royal Dutch Shell.

Friday 27

UK RESULTS: (Q3) GlaxoSmith-Kline, Shire.

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