By Kate Hanaghan, 8 May 2002 10:30
NEWS UK companies made fewer profit warnings in the first quarter of this year than at any other point in the last 15 months. Compared with the fourth quarter of 2001 the number of profit warnings was down 39 per cent. However, this substantial reduction is related to the abnormal number of warnings following 11 September. The figures, from a study by Ernst and Young, also show investors have got tougher on companies who issue profits warnings. Following a warning, share prices fell an average of 14 per cent in the last quarter of 2001. However, during the first quarter of this year the figure was up to 21.9 per cent. The share prices of telecoms companies were the hardest hit - falling by an average of 36 per cent following a warning. However, trading this morning was characterised by a general upward movement on the European markets in response to news that Cisco had turned in better-than-expected results for its third quarter. The TechMark 100 was up by one per cent as was the pan-European FTSE Eurotop 100 index. Cisco itself closed up 1.47 per cent overnight.
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