Aug 1, 2017
Rolls-Royce and BP join UK earnings winners
Shares in Rolls-Royce rose more than 10 per cent on Tuesday in response to its surge in earnings, while BP's were up 2.4 per cent, adding to the optimistic mood set by strong results from HSBC on Monday. Profit growth has averaged 20 per cent from Britain's biggest companies in the three months to June 30, according to UBS, helped by a recovery in commodity prices and the depreciation of the pound, which flattered earnings made overseas. Earnings from FTSE 100 companies have beaten analysts' consensus expectations by an average of 1-2 per cent, according to UBS. Direct Line, the insurer, and Intertek, the product-testing group, were among the latest to beat market forecasts with strong results on Tuesday. Three-quarters of aggregate quarterly earnings growth was attributable to higher commodity prices compared with a year ago, according to UBS. One of the biggest beneficiaries was Royal Dutch Shell, which reported a trebling in quarterly earnings last week. David Larkam, an analyst at Numis, said it had been an impressive earnings season for UK engineering companies: "Everybody seems to be slightly outperforming."
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