Three companies reporting today have had a mixed 12 months. Will their latest results turn things round?
BT or not BT
BT Group (LSE: BT.A) has been a great call over the last five years withitsshare price up110%. Butits down nearly 13% over the past 12 months. Todays first quarter results have given it a lift, with the share price risingmore than 3% in early trading.
Investors will be pleased with expectations-beating profits as BT continued theintegration of its January purchase of EE and posted a 35% rise in revenue to 5.78bn. EBITDArose 25% to 1.82bn, beatingconsensus estimates of 1.78bn. With a 16% rise adjusted pre-tax profit to802m, chief executive Gavin Patterson can rightly claim a good start to the yearwith thepromise of more to come.
BT can boast fibre broadband dominance with more than 25m premises and sporting success through its BT Sport offering, which includes renewed FA cuprights and more Premier League games at better time slots, on top ofexclusive Champions League and Europa League coverage.
Success in the growing quad-play market shows BT hasnt lost its edge and it looks a tempting buy at 12.11 times earnings, yielding 3.37%, especially if it retains its links withOpenreach, which currently seems likely.
Shrinking assets
Asset management group Schroders (LSE: SDR) hasalso hada tough 12 months with the share price down 13%. Like allfund managers it has been hit hard by stock market volatility, only to cash in on the post-Brexit market rebound bonanza. The stock is up 28% over the last month but todays half-year results have spoiledthe fun, with the share price edgingdown on deflatingnews of a 2.76% drop in profit before tax from 290.3m to 282.3m.
Schroders has suffered a drasticdecline in net inflows with the total just 0.7bn, down from 8.8bn in the same period last year. That was a blow to confidence even though assets under management hit a record343.8bn, up from 309.9bn. Chief executive Peter Harrison blamed that catch-all scapegoat Brexit and warned of a further hit toinvestment demand, which sounds dubiousas markets are actuallysoaring. At todays 14.92 times earnings, the moment to buy Schroders may have passed for now.
Here Weir goes
Where the oil price goes, so goes hydraulic pump maker and shale supplierWeir Group (LSE: WEIR). It was hit hard by the oil price fall but is up 75% over the past six months, its share price graph enjoying a vertiginousclimb as crude rosefrom $27to $51 a barrel. The oil price is slipping again but the stockhas heldfirm, at least until todays underwhelming results.
Weirposted a 25% fall in pre-tax profit to 82m in the six months to 30 June, with revenue down13% at constant currencies to 866m, as weak oil prices hitthe business.Earnings per share fell23% to 29.6p. Departingchief executive Keith Cochrane was bullish about the results, pointing out that the group remainshighly cash generative and has been aggressively cutting costs. But with the stock now trading at a pricey 17.79 times earnings and oil slipping to $43, investors will be wishing theyd bought six months ago rather than rushing tobuy today.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended Weir. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
