Glencore will announce its full-year figures on 1 March, and traders are expecting revenue of $165 billion and adjusted net income of $1.16 billion. These forecasts equate to a 25% fall in revenue and a 72.8% drop in adjusted net income. The firm will also report its second-half numbers on the same date, and investors are anticipating revenue of $72.99 billion and adjusted net income of $582 million, which compares with the first-half revenue and adjusted net income of $85.7 billion and $882 million respectively.
Glencore has been at the eye of the commodity storm and the stock received a battering by the markets when commodity prices crashed. The subsequent questioning of its finances put an enormous amount of pressure on the company. The mega miner reacted by suspending its dividend and undergoing an extensive asset stripping scheme and confirming its credit lines.
Investors certainly have more confidence in the company but the fact still remains it is engaged in a sector which is facing major challenges. The fundaments of the mining industry haven’t changed; there is a considerable amount of oversupply in the metals market and demand is weak, and this continues to be a problem for Glencore even if it’s balance sheet is stronger now than it was in August.
Earnings vs estimates
Out of the past four full-year announcements the revenue figures exceeded expectations 75% of the time, and the earnings per share (EPS) number topped the forecast 50% of the time. We can expect volatility on the day the figures are revealed as the share price has moved an average of 3.65% on the day of the announcement, but only 50% of the moves have been positive.