Company Results Fail to Impress

The Bank of England held the Bank Rate at 0.5% for the twelfth consecutive month on Thursday and, as widely expected, kept its programme of quantitative easing on hold. Investors remained cautious after a series of less than stellar company reports and the FTSE 100 index closed down 6.05 points or 0.1% at 5,527.16, failing to extend its winning streak to a fifth session.

Dominic Turner
shareprices.com - Thursday, March 04, 2010

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Oil services and engineering group Amec was the biggest laggard in the top tier, falling 55p or 6.7% to 765.5p, despite reporting profits of £208.3 million, up 13% and ahead of market expectations. Falling oil prices have caused customers to delay projects and a cautious outlook statement, in which Amec said that trading conditions remained challenging, was sufficient to send investors running for cover.

Results from Aviva, the second largest insurer in the UK, were also poorly received and the stock closed down 10.2p or 2.61% at 380p. The firm actually reported a 3% rise in operating profits to £3.48 billion from £3.37 billion, ahead of market expectations, but cut its dividend by 27% to 24p a share from 33p a share in 2008.

Car insurer Admiral, whose full-year results missed market expectations on Tuesday, compounded losses with a fall of a further 32p or 2.58% to 1,210p on Thursday after a series of broker downgrades. Citigroup and Morgan Stanley downgraded the stock to "hold" from "buy" and "equal weight" from "overweight" respectively, following a similar downgrade to "neutral" from "buy" by BoA Merrill Lynch on Wednesday.

 

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