Earnings look ahead – Rolls-Royce, Premier Oil, Inmarsat

A look at earnings next week.

Source: Bloomberg

Rolls-Royce (full-year earnings 7 March)

Rolls-Royce finds itself in the middle of a restructuring programme, which will dominate these figures. Further simplification is likely from the CEO, Warren East, in order to boost transparency. In addition, we look for comments on its commercial marine business, which had been potentially up for sale. The firm confirmed back in January that it was still on track to hit forecasts.

Rolls-Royce has fallen back from the highs of 2017, but for now it has found support at the rising trendline from the 2016 lows. A recovery here brings £8.75 and £9.26 into view. A further drop could find support at £7.92 and then £7.38.

Premier Oil (full-year earnings 8 March)

Premier Oil was of course hit hard by the rout in oil prices. However, there are signs of hope. November’s trading update highlighted its progress toward meeting its production goals of 75,000-80,000 barrels per day for the year, while net debt continues to decline. December brought a production update that highlighted the first oil from its Catcher field, with output there continuing to rise. On a price-to-earnings (PE) ratio of 4, the shares are definitely in bargain territory.

The shares established a new high in January hitting 104p, breaking the December 2016 high at 99p. A sharp retracement since then still leaves the shares in an uptrend. If this is lost then 49p and 43p are possible support.

Inmarsat (full-year earnings 9 March)

A five-year low in Inmarsat shares confirms the problems that are continuing to hound the company. The firm lowered revenue guidance for the year and also sounded an alarm over its aviation business. HSBC analysts have recently cut forecasts as well, with concerns about the viability of the dividend top of its list of worries.

The shares have declined precipitately over the past two years, finding short-term support at 418p. However, so far rallies have been knocked back from £5.00, and if 418p is lost, then 364p and 300p come into play. Above £5.00, £5.94 will act as support.

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