The Week Ahead: Will BT ring up the right revenue numbers?

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The Independent Online

No wonder people are worried about BT Group's revenues. The telecoms giant is under attack from a plethora of rival services offered by the likes of Carphone Warehouse's TalkTalk. As a result, it is the call and line rental income from household customers that is likely to be the focus of investor attention when BT posts its first-quarter figures on Thursday.

No wonder people are worried about BT Group's revenues. The telecoms giant is under attack from a plethora of rival services offered by the likes of Carphone Warehouse's TalkTalk. As a result, it is the call and line rental income from household customers that is likely to be the focus of investor attention when BT posts its first-quarter figures on Thursday.

BT's shares are presently priced as if it were a utility, but this may be a mistake given the company's growth potential. Analysts are most excited about the roll-out of its broadband services across the UK. BT is also making a return to the mobile phone arena, despite the de-merger of mmO2, as a virtual network operator akin to Virgin Mobile, which floated last week.

Williams de Broe believes the group's strategic position is superior to that of its European peers, having already coped with a great degree of deregulation and being among the less indebted of the Continent's incumbents. The broker forecasts BT will post a first-quarter pre-tax profit of £440m, down from £502m for the same period last year.

TODAY: The direction of advertising revenues at the Financial Times looks set to be the most interesting part of Pearson's interim results statement. The other important part of the update will be the outlook statement from management for the Schools and Higher Education publishing businesses. Pearson profits are traditionally heavily weighted towards the second half of its year. For the first half, analysts predict a loss of about £6m.

Reckitt Benckiser, the household goods group behind Mr Sheen polish and Lemsip, is on target to deliver sales growth of 6 per cent and a net income increase of 15 per cent for 2004. This is well ahead of the company's own internal targets. Reckitt's impressive financial performance is thanks to a mixture of organic growth and cost savings. Second-quarter net income is expected to be £134m.

Results: Full year - London Clubs International. Interims - Aggregate Industries; Eurotunnel; Pearson; Reckitt Benckiser; Royalblue Group.

TOMORROW: The second quarter is likely to see record results from BP, with more to come as the oil industry continues to benefit from the buoyant price of crude. Clean net income should jump to $4.4bn (£2.4bn) from $2.9bn previously. Meanwhile, the company's share buy-back programme continues. At BP's March strategy update, it promised share buy-backs worth $4bn in 2004.

Second-quarter profits at GlaxoSmithKline will be lower than those seen in 2003 as the company comes up against generic competition to a number of its drugs, most importantly the antidepressants Paxil and Wellbutrin. Shareholders can expect a fall to £1.5bn from £1.9bn. Competition looks set to weigh on the drug giant's third quarter as well, but analysts hope the company can still assure them that things will start to improve by the fourth. Meanwhile, brokers are hoping for a series of positive statements this year from GSK on four important new drugs that are currently in proof-of-principle trials.

Results: Full year - Games Workshop. Interims - Alliance & Leicester; BP; BAT: GlaxoSmithKline; Novar; Provident Financial; Reuters; RPS Group; St James's Place Capital.

WEDNESDAY: George Wimpey shares have lost a quarter of their value since their April peak due to worries about the slowing UK housing market. But bulls of the housebuilder's stock point out that UK demographics mean housing demand in Britain is set to outstrip supply for many years to come. In their view, Wimpey's stock-market rating - the group's shares trade at just 4.3 times next year's earnings - is ridiculously low. Interim profits at Wimpey are tipped to register a 16 per cent rise to £146m.

Results: Full year - Daejan Holdings; Monsoon. Interims - BG Group; Bookham Technology; Croda International; Datamonitor; Domino's Pizza; Electric Word; Elementis; Hanson; HBOS; RAB Capital; RAC; Unilever; Wimpey.

THURSDAY: Gerrard, the stockbroker, forecasts a solid second-quarter performance from ICI compared with the second quarter of 2003. However, it does warn that the chemicals giant will be impacted by the weakness of the dollar and high raw material prices. Gerrard expects ICI to deliver a relatively positive outlook statement, particularly regarding trading in the United States.

Results: Full year - Jarvis. Interims - Abbey National; Alliance UniChem; BT Group; Centrica; ICI; Legal & General; National Express; Rio Tinto; Rolls-Royce; Shell; Shire Pharmaceuticals; Trinity Mirror; United Business Media.

FRIDAY: Results: Full year - None. Interims - EQ Group; Exel; Flying Brands; Lloyds TSB.

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