Weak Earnings Drag UK Stocks; Diaego Falls

Mayank Mehta
27 Aug, 2009
New York City

UK stocks edged lower for the second day after financials and miners closed lower. Arriva Plc and Diaego Plc reported weaker than expected results. Kazakhmys increased after it estimated higher production volumes and lower operating costs in the current year. Savills Plc decreased 8.2%.

[R]7:00PM London, 2:00 AM New York – UK stocks edged lower for the second day after financials and miners closed lower. Arriva Plc and Diaego Plc reported weaker than expected results. Kazakhmys increased after it estimated higher production volumes and lower operating costs in the current year. Savills Plc decreased 8.2% after first-half profit plunged 97%.[/R]

UK stocks edged lower for the second day on a weak commodities prices and weakening sentiment in the financial sector. The market noted that the U.S. based Federal Deposit Insurance Corporation increased the number of problem banks by 36% to 416.

Diego, the drinks and liquor maker declined after it offered weak earnings outlook in the current fiscal year.

In London trading FTSE 100 Index closed lower 17.84 or 0.3% to 4,872.74 and the pound closed unchanged at $1.61 and 1.13 euros.

C&C Group, the Irish cider company surged 16% to 2.59 euros after it agreed to acquire beer business in Northern Ireland and Scotland for £180 million from Anheuser Busch InBev.

Gainers & Losers

888 Holdings PLC fell 6.4% to 88.30 pence an online gaming firm said first-half revenues fell 13% to £117.9 million from £131.5 million a year ago. Net profit for the first-half fell 57% to £8.1 million or 2.3 pence per diluted share compared to net profit of £18.9 million or 5.4 pence per share a year ago.

AMEC plc plunged 4.8% to 739.50 pence after the provider of consultancy, engineering and project management services said first-half revenues were flat at £1.26 billion from £1.26 billion a year ago. Net profit for the first-half fell 4.7% to £65.3 million or 19.5 pence per diluted share compared to net profit of £68.5 million or 20.6 pence per share a year ago.

Arriva plc tumbled 2.2% to 480.00 pence after the public transport operator said first-half revenues rose 9.4% to £1.58 billion from £1.44 billion a year ago. Net profit for the first-half fell 15.6% to £39.9 million or 20.0 pence per diluted share compared to net profit of £47.3 million or 23.8 pence per share a year ago.

Bloomsbury Publishing Plc the book publisher rose 121.50 pence.

Carillion plc added 1.0% to 311.10 pence after the construction and infrastructure company said first-half revenues rose 13% to £2.72 billion from £2.41 billion a year ago. Net profit for the first-half rose 72% to £44.2 million or 11.1 pence per diluted share compared to net profit of £25.7 million or 6.9 pence per share a year ago.

Chaucer Holdings PLC advanced 3.3% to 46.50 pence after specialist insurance and reinsurance underwriting group said first-half revenues rose 19.3% to £331.3 million from £277.8 million a year ago. Net profit for the first-half rose 340.7% to £11.9 million or 2.6 pence per diluted share compared to net profit of £2.7 million or 0.8 pence per share a year ago.

Computacenter PLC decreased 3.8% to 272.00 pence an IT services and computer reselling company said first-half revenues fell 2.2% to £1.22 billion from £1.25 billion a year ago. Net profit for the first-half rose 19% to £9.4 million or 6.3 pence per diluted share compared to net profit of £7.9 million or 5.2 pence per share a year ago.

Diageo plc sank 3.2% to 964.50 pence after the alcoholic drinks giant said in a year of global economic downturn company delivered organic net sales in line with the prior year; 4% organic growth in operating profit and 10% growth in reported earnings per share.

Forth Ports plc slumped 1.9% to 1,282.00 pence after the ports-to-property group said first-half revenues fell 4% to £86.6 million from £90.1 million a year ago. Net profit for the first-half rose 81% to £8.5 million or 18.5 pence per diluted share compared to net profit of £4.7 million or 10.3 pence per share a year ago.

Hunting PLC climbed 4.1% to 476.60 pence an energy service provider said first-half revenues rose 9% to £219.8 million from £201.2 million a year ago. Net profit for the first-half fell 47.6% to £17.6 million or 13.2 pence per diluted share compared to net profit of £33.6 million or 24.9 pence per share a year ago.

IMI plc rose 14.5% to 460.00 pence after the engineer said underlying levels of demand would appear to have stabilized following the very sharp reductions seen in some of our businesses in the early part of the year. Net borrowings have reduced by £35 million to £264 million and the dividend has been maintained.

Kazakhmys PLC gained 4.5% to 959.00 pence an international natural resources company said first-half revenues fell 42% to $1.64 billion from $2.83 billion a year ago. Net profit for the first-half fell 15% to $516 million or 96 cents per diluted share compared to net profit of $608 million or $1.34 per share a year ago.

Lloyds decreased 3.5% to 104.7 pence after the company explores the possible asset sales including initial public offering of Scottish Widows.

National Express Group PLC added 4.8% to 419.50 pence after the bus and trains operator said that the consortium of CVC capital partners and interests of the Cosmen family has made a revised proposal to acquire the entire issued and to be issued share capital of the group for 450 pence per share in cash.

Segro plc the property group declined 3.8% to 352.10 pence after it reported larger than expected first half loss of £480.1 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 34 increased, 66 declined and 2 were unchanged.

BAE Systems Plc decliners in the FTSE 100 index with a loss of 5.56% followed by losses in Diageo Plc of 4.06%, in Xstrata Plc of 4.06%, in AMEC Plc of 3.99%, in Lonmin Plc of 3.87%.

Smith & Nephew Plc led gainers in the FTSE 100 index with a rise of 4.61% followed by increase in Invensys Plc of 3.67%, in Centrica Plc of 3.01%, in Kazakhmys Plc of 2.13%, in Barclays Plc of 1.63%.