Suppliers share wrap – GKN takes a hit on share recommendation downgrade
GKN Aerospace shares took a major hit on Wednesday, following BofA Merrill Lynch Global Research downgrading its recommendation on GKN Plc, the company's parent, to "underperform".
The aerospace business reported a 1Q2010 pre-tax profit of GBP71 million, compared to a GBP29 million loss for the same period in 2009. The company expects results to improve through the year, as a result of accelerating production by major aircraft manufacturers.
The outlook for the company's automotive and off-highway units is not as strong, with forecasts of tough conditions in the European auto market and its 'China Driveline' business also expected to report 'negative news'.
European aerospace manufacturing stocks were among the hardest hit on Wednesday, with Meggitt down 4.8%, Rolls-Royce trading down 4.6% and MTU Aero Engines losing 4.1%.
EADS and B/E Aerospace both lost ground, down 3.5% and 3.1% respectively.
Selected Aviation suppliers' daily share price movements (% change): 19-May-2010
Source: Centre for Asia Pacific Aviation & Yahoo! Finance