LONDON -- Difficult automotive and civil aerospace markets are expected to weigh on British engineering firm GKN Plc's 2002 earnings when it reports on Monday, but the company is expected to be within the market range for underlying profits.
GKN, which counts about 70 percent of its revenues from the sale of parts to car makers, said in November it expected the North American automotive market would weaken in 2003 and European motor vehicle production would remain subdued.
Analysts' forecasts for 2002 pre-tax profits before exceptionals and goodwill amortisation range from 240 million to 260 million pounds ($381-411 million), compared with 245 million for 2001. Many analysts are tipping about 251 million.
"They've kept the market up to speed on 2002, so we'll be focusing on any change the company might make to their 2003 outlook. They've already said 2003 will be challenging," said an engineering analyst, who asked not to be named.
In November GKN said: "The outlook for our major markets in 2003 continues to be uncertain," and Finance Director Nigel Stein told Reuters at the time that GKN was assuming a five percent fall in North American auto markets and a flat Europe.
On pension risks, GKN said in August its potential unfunded retirement fund deficit had increased to 343 million pounds at June 29 last year from 169 million pounds at the end of 2001 because of falling stock markets.
GKN said at the time it would contribute a further 10 million pounds a year into the pension scheme for "at least the next three years" to help fund the deficit. Stock markets have since deteriorated on economic uncertainty and fears of war.