The Morning Call - Royal Dutch Shell report 37% increase in profit

Highlights of the Day

Asian Markets

After a volatile October, Asian stock markets started November with widespread gains.

U.S. Markets

Stocks rose sharply for a second straight day as strong earnings from General Motors and Facebook lifted sentiment.

Today's News

UK house prices rose at the slowest pace in nearly five-and-a-half years in October, figures from the Nationwide Building Society showed on Thursday. The house price index rose 1.6% year-on-year following a 2% increase in September. Economists had forecast a 1.90% gain.

China’s manufacturing sector expanded only slightly in October as output remained broadly unchanged amid marginal increase in new business, survey data from IHS Markit showed Thursday. The Caixin Purchasing Managers’ Index came in at 50.1 in October versus 50.0 in September. The reading was expected to remain unchanged at neutral level of 50.0.

Royal Dutch Shell reported a 37% increase in third-quarter profit to $5.6bn from $4.1bn a year earlier, boosted by higher realised oil, gas and LNG prices. The company distributed total dividends of $3.9bn to shareholders in the quarter and, in October, it completed the first tranche of its share buyback programme. It bought back almost 61m A ordinary shares for cancellation for an aggregate consideration of $2bn.

Smith & Nephew reported a 3% increase in third-quarter underlying revenue and reconfirmed its full-year guidance as it implemented a new global commercial model. The firm said that growth in its US and Emerging Markets segments had supported the 3% increase to $1.169bn.

BT Group reported said full-year earnings were expected toward the upper range of guidance after profits jumped by nearly a quarter in the first half of the year driven by growth in its consumer division. The company said it expected earnings (EBITDA) to be in the upper half of its £7.3bn to £7.4bn range.

Admiral said it expected to report an impairment charge from Compare.com following an investment in the company at a discount, but stressed that full-year performance would meet guidance. The current outlook was for the full year Admiral share of loss to be in line with the guidance at the 2018 half-year results of US$8m to US$13m.

Just Eat said it expected full-year revenue near the top end of guidance, but earnings near the lower end after reporting a jump in third-quarter revenue amid stronger performance in September. The company said it anticipated full year revenues to be towards the top end of the £740m to £770m range and underlying earnings (EBITDA) towards the lower end of the £165m to £185m range as costs investments in Latin American were expected to weigh on margins.

Croda International reported that its sales for the third quarter rose 2.9 percent in reported currency and also increased 0.5 percent year to date, with currency translation headwinds moderating. In a trading update for the third quarter ended 30 September 2018, the company said its year-to-date profit margin continued slightly above the prior year, reflecting improved product mix and pricing, growing value ahead of volume.

Centamin reported Q3 revenue up !% to $125m however pre-tax profit dropped 1% to $21.8m. The company said Q4 operations were performing in line and their guidance remained unchanged.

BHP said it would return $10.4bn to its shareholders through the combination of an off-market $5.2bn buy-back programme and a further $5.2bn in the form of a special dividend.

Stobart Group’s Stobart Air said it had secured a deal to provide BA CityFlyer with new aircraft, crew, maintenance and insurance services.

Credit Suisse profits jumped 74% to 424m Swiss francs (£327m) in the three months to September as operating expenses fell faster than a 2% decline in net revenues. However, that was 10% lower than the increase analysts had expected.

Ascential is expanding in the US with the $60m cash acquisition of Flywheel Digital, a provider of managed services to consumer product companies trading on Amazon.

Oil Prices fell, extending losses in previous sessions, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown.

Gold Prices fell as the dollar scaled a 16-month peak and a stock market rebound stirred renewed appetite for riskier investments.

Companies Reporting this week

Day	Companies
Monday:	HSBC
Tuesday:	Hunting * Reckitt Benckiser * BP
Wednesday:	Computacenter * Next * GlaxoSmithKline * Standard Chartered * Smurfit Kappa
Thursday:	BT * Smith & Nephew * Royal Dutch Shell * Croda International * Centamin
Friday:	Millennium & Copthorne * TP ICAP * Paddy Power Betfair

Early Market Movements

Market	Index	Change	% Change
UK 100	7,106.9	-21.2	-0.3%
UK 250	18,920.9	+3.2	+0.0%
GER 30	11,443.2	-4.3	-0.0%
FRA 40	5,083.9	-9.5	-0.2%
US 30	25,115.76	+241.12	+1.0%
US 500	2,711.74	+29.11	+1.1%
Oil (Crude)	74.77	-0.27	-0.4%
GOLD	1,223.96	+9.20	+0.8%

UK Risers & Fallers (8:15am)

Company	Price	Change	% Change
BT Group	257.85	+17.3	+7.2%
Smith & Nephew	1345	+71.5	+5.6%
Spire Health	126.4	+9	+7.7%
Wood Group (J)	698.6	-15.6	-2.2%
BP	555.4	-11.9	-2.1%
Dairy Crest	464	-14.2	-3.0%

Latest Broker Views

Company	Broker	Recommendation	Price	Target
St James’s Place	Berenberg	Buy	1013.5	1575
Standard Chartered	Deutsche Bank	Hold	549.5	620
BT Group	JPMorgan	Overweight	240.55	290
GlaxoSmithKline	CFRA	Hold	1511.2	1650

Forthcoming Economic Data

Time/Date	Previous	Forecast	Outcome
1.00pm: U.K. BOE Inflation Report	–	–	–
1.00pm: U.K. MPC Official Bank Rate Votes	0-0-9	0-0-9	–
1.00pm: U.K. Monetary Policy Summary	–	–	–
1.00pm: U.K. Official Bank Rate	0.75%	0.75%	–
1.30pm: U.K. BOE Governor Carney Speaks	–	–	–
3.00pm: U.S. ISM Manufacturing PMI	59.8	59.0	–