Glaxo, Vodafone updates punctuate mid-week, US earnings eyed from Spotify and Qualcomm

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The mid-point of the week will see pharma and telecoms dominate the UK corporate calendar with trading updates expected from both GlaxoSmithKline and Vodafone.

There will also be yes on the US earnings season later in the day as numbers are expected from big hitters including music streaming giant Spotify Technology SA (NYSE:SPOT) and computer chip maker Qualcomm Inc (NASDAQ:QCOM).

Meanwhile, the macro calendar is scheduled to see PMI data from both the UK and US services sectors.

Injection of results from GSK

GlaxoSmithKline PLC (LON:GSK) is releasing its fourth-quarter results mid-week where the market is eager to read an update on the COVID-19 vaccine developed with Sanofi.

A new study will begin in February with a final trial in the second quarter and regulatory submissions in the third, so if it goes well it will be available later in 2021, though it will be months behind competitors Pfizer/BioNTech, Moderna, and Oxford/AstraZeneca.

Analysts will also focus on the sales numbers, which will indicate how the FTSE 100 firm’s new drugs are helping to compensate for the loss of patent protection on older ones.

The drugmaker previously said momentum has tailed off because lockdowns are limiting visits to doctors and hospitals.

Earnings per share will also be eyed after the company said in October they would come in at the lower end of the forecast range of down 1-4%.

Analysts at AJ Bell said guidance for 2021 will be very important considering consensus forecast is currently for pretty flat adjusted EPS at 116.4p.

Finally, shareholders will want to hear on dividends, where an unchanged full-year payment of 80p per share is expected.

“GlaxoSmithKline shares are down by a quarter over the past year… This seems odd when in light of the rush to defensive stocks as the pandemic broke just under a year ago and how GlaxoSmithKline is the world’s leading provider of vaccines: it has a 30% global market share and produces and distributes about two million vaccines a day worldwide for everything from meningitis to whooping cough and from hepatitis to flu,” analysts at AJ Bell said.

“Possible reasons for the turgid share price performance include the company’s recent pedestrian earnings and dividend growth profile, some lingering concerns among analysts about weak dividend cover, and also disappointment that the company seems slow off the mark in the race to beat COVID-19.”

Vodafone calls in with update

Telecoms giant Vodafone Group PLC (LON:VOD) will issue a trading update on Wednesday, with analysts hoping the company will continue to see an improvement in top-line growth and maintain its guidance for the full year of earnings (EBITDA) of between €14.4-14.6bn.

Analysts at UBS said they expect the company’s service revenues to fall 0.14% in the third quarter, a reduction from the 1.3% and 0.4% declines in the first and second quarters respectively.

Meanwhile, investors may be eyeing any updates from the company on the ongoing challenge by the government of India to Vodafone’s US$2bn tax rebate awarded to it by an independent tribunal in the Netherlands.

Vodafone was awarded the payment in September when an international arbitration tribunal in The Hague ruled that India’s tax breached an investment treaty agreement between India and the Netherlands, however, an Indian official has said the South Asian country will challenge the ruling in Singapore.

Significant announcements for Wednesday, February 3:

Trading announcements: GlaxoSmithKline PLC (LON:GSK), Vodafone Group PLC (LON:VOD)

Interims: Frontier Developments PLC (LON:FDEV)

Economic data: UK services PMI, US services PMI, US non-manufacturing PMI

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