Market Watch: Flu fall-off set to impact on drug giant

AstraZeneca upped profit expectations at the end of October as it said it was being boosted by additional orders for the H1N1 flu vaccine.

Vaccine sales in Astra's third quarter helped Astra bank sales of $8.2 billion (5.1bn), with pre-tax profits rising to $3.03bn (1.88bn).

And it increased full-year earnings guidance, given that the rest of the swine flu vaccine sales were due in the next three months. But since then, the spread of swine flu has been easing.

Astra has also been boosted by the withdrawal of generic products for Toprol-XL and analysts are expecting Astra to deliver a 31 per cent leap in full-year pre-tax profits from $8.68bn (5.39bn) to $11.38bn (7.06bn).

And some in the market believe the group has been significantly undervalued.

Broadcasting giant BSkyB reports interim figures on Thursday after what analysts have described as a solid performance amid the recession.

But the group is likely to find attention focused on its next move following the rejection of its latest appeal over the forced sale of most of its stake in ITV.

The Court of Appeal stood by the government's decision to force BSkyB to reduce its 17.9 per cent ITV holding to 7.5 per cent.

The group has already suffered losses of around 500m on the investment and the market will be keen for any clue on plans to offload the shares.

Away from the courts, BSkyB reports back on another expected robust quarter, with analysts at Numis Securities pencilling in a 10 per cent hike in interim revenues to 2.86bn and for profits to rise 10 per cent on a year ago to 360m.

Sam Hart, an analyst at Charles Stanley, said: "There have been few signs to date that the company is being impacted by the recessionary environment."

Festive trading figures from retailer WH Smith due on Wednesday will be treated with some apprehension after the firm's previous caution on prospects before Christmas.

WH Smith previously reported a 1 per cent decline in total sales during the ten weeks to 7 November compared with a year earlier, with revenues in stores at airports and railway stations down 2 per cent on an like-for-like basis.

The worst performing sector was the high street, where same-store sales dipped 4 per cent, although the company said its overall performance was in line with expectations.

Under the leadership of chief executive Kate Swann, the company has reduced its reliance on the highly competitive entertainment market.

Week ahead

TOMORROW

No results scheduled

TUESDAY

PZ Cussons (interims); Sage, Severn Trent (trading updates)

WEDNESDAY

Renishaw (interims); Britvic (AGM), WH Smith (AGM, trading update)

THURSDAY

AstraZeneca (finals); BSkyB (interims); JJB Sports (trading update); Mitchells & Butlers (AGM)

FRIDAY

Safestore (finals)