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Earnings Calendar: April 3 – 7

It’s all quiet on the earnings front this week as markets prepare for the next wave of results that will start to filter through next month.

In the US, we have results out from food manufacturer ConAgra Brands (CAG), alcohol giant Constellation Brands (STZ), and jeans maker Levi Strauss (LEVI).

French catering giant Sodexo headlines the European calendar. In the UK, we have annual results out from oil company EnQuest and Hilton Food Group, as well as a production report from iron ore producer Ferrexpo.

Constellation Brands (STZ)

Constellation Brands, known for owning brands like Corona beer and Casa Noble Tequila, will be up against tougher comparatives in the final quarter of its financial year, especially for its beer business as its premium brands feel the pressure from consumers tightening their belts. Wall Street forecasts revenue will be down 4.4% at $2.00 billion, with analysts pencilling-in a 4% drop in beer sales and a 5.1% decline from wine and spirits. The wine and spirits arm has been struggling for years but there has been an improvement this year and the next one could be an inflection point that see sales return to growth for the first time in five years. Meanwhile, adjusted EPS is expected to plunge for a second consecutive quarter, this time by over 22% to $1.84, as lower sales and tighter margins bite. The outlook for the new financial year will be key. Markets are hoping Constellation Brands will aim to grow beer sales by 6.7% and wine and spirits by 2.4% and target adjusted EPS of $11.73.

Hilton Food Group

Hilton Food Group lowered expectations back in November as the inflationary environment takes its toll. Sales are forecast to rise 20% from last year and hit a new record of £3.97 billion, with all regions apart from Central Europe set to deliver double-digit growth. However, adjusted pretax profits are expected to tumble 19% to £54.6 million as rising costs, higher interest rates and increased investment to get new acquisitions and projects up and running all weigh on the bottom-line. Still, Hilton Food says its new acquisitions can drive growth over the medium-term and remains on the lookout for more suitable targets.

EnQuest

Oil and gas firm EnQuest has taken most of the surprise out of the its annual results this week after providing an update in February, revealing it delivered record free cashflow and reduced and refinanced its debt. A 6% increase in production twinned with higher prices should push revenue up 20% to £1.5 billion. Gross profit is forecast to almost double. Pretax profit is expected to jump by 33% but analysts believe profit after tax will drop to £282.8 million from £377 million the year before because of a much larger tax bill. That will be driven by the UK windfall tax on domestic producers and because it is no longer able to offset its taxes through investment. This is making such a big impact that EnQuest has already deferred drilling at its major Kraken project. EnQuest has warned production will decline this year, which markets think could deliver flat revenue. The company has deleveraged its balance sheet and some analysts think this could give EnQuest the ability to pursue M&A, most likely overseas as the UK windfall tax prompts companies to expand elsewhere.

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