Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  London Stock Exchange  >  GKN    GKN   GB0030646508

Mes dernières consult.
Most popular
No quotes available
-- GBp   0.00%
05/25GKN : Aerospace pursues potential new wiring manufacturing facility ..
05/18GKN PLC : - Treasury Stock
05/17GKN PLC : - Treasury Stock
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

GKN : shares slump after 'blow to the head' profit warning

share with twitter share with LinkedIn share with facebook
share via e-mail
10/13/2017 | 10:16am CEST

LONDON (Reuters) - GKN warned on its year profit on Friday citing disappointing aerospace trading and two external claims that were expected to cost $53 million, hammering shares in the British engineering company.

Chief Executive Nigel Stein, who steps down at the end of the year, said the surprise claims and a failure to make productivity improvements in its North American aerospace business were "very disappointing" after 16 years of delivering on expectations.

"Frankly this feels like walking down the street and being mugged," he said.

"We've taken a blow to the head, but we'll pick ourselves up and carry on."

GKN, which dates back to 1759 and employs 58,000 people across 30 countries, now expects its full-year pretax profit to be "slightly above" the 678 million pounds recorded in 2016.

Analysts on average had forecast profit to rise to 735 million pounds, Thomson Reuters data showed.

Shares in the company fell 9 percent in early trading, wiping half a billion pounds off its market value.

The warning comes as GKN embarks on a round of management changes, with Stein to be replaced by Kevin Cummings, currently head of the aerospace division.

Finance Director Adam Walker is due to leave in November.

Stein said it would take a couple of years before margins improved in its North American aerospace business, adding that recent performance had been below his expectations.

"Trading in the third quarter has been disappointing with a significant reduction in margin caused by on-going pricing pressure, continuing operational challenges and the impact of programme transitions," GKN said of its aerospace operations.

It said the headwinds would not ease in the final quarter.

"In addition, it is disappointing that we expect to have to provide for two unexpected claims which will slow our steady growth in profits," Stein said.

Stein said while changes to pricing in aerospace had not been dramatic, the company had not adapted properly.

GKN did not disclose many details about the external claims, one of which is in aerospace and one in its Driveline automotive power transmission business, saying they were commercially sensitive.

Stein said they were informed of the claims in a 24-hour period earlier this week. He said they were not litigation and did not expect them to be recurring.

The company said Driveline was continuing to outperform a global market growing at around 2 percent, but it was having to bear additional costs for raw materials and investment in systems for electric vehicles.

"The shame of the profit 'warning' is that organic sales growth in the third quarter appears to have been satisfactory," Jefferies analysts said in a note.

"Ultimately, we cannot help but wonder whether this disappointment today will drive more significant change in due course."

The British group has often faced speculation that it could be broken up into automotive and aerospace units.

($1 = 0.7535 pounds)

(Editing by Kate Holton and Jason Neely)

By Paul Sandle

share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on GKN
05/25GKN : Aerospace pursues potential new wiring manufacturing facility in India
05/18GKN PLC : - Treasury Stock
05/17GKN PLC : - Treasury Stock
05/14GKN : Aerospace sells the 1000th Electronic Flight Bag solution to Hi Fly
05/11IWG receives takeover approaches from three suitors
05/09GKN POWDER METALLURGY BECOMES ONE OF : 2016 certified 3D metal printing supplier..
05/08GKN PLC : - Treasury Stock
05/03GKN PLC : - Result of AGM
05/03GKN : Proxy Statments
04/27GKN : Compulsory Acquisition of remaining GKN Shares
More news
News from SeekingAlpha
02/28GKN Plc ADR 2017 Q4 - Results - Earnings Call Slides 
2017GKN (GKNLY) Presents At Robert W. Baird 2017 Global Industrial Conference - S.. 
2017GKN's (GKNCF) on Q1 2017 Results - Earnings Call Transcript 
2017GKN's (GKNCF) CEO Nigel Stein on Q4 2016 Results - Earnings Call Transcript 
2017GKN Plc 2016 Q4 - Results - Earnings Call Slides 
Income Statement Evolution
Anne L. Stevens Chief Executive Officer
Gavin Wesson Senior Vice President-Operations & Programmes
Jos Sclater Group Finance Director
William James Hoy Chief Financial Officer
Russell Gary Dunn Senior Vice President-Engineering & Technology
Sector and Competitors
1st jan.Capitalization (M$)
CONTINENTAL-13.22%46 686
DENSO CORP-19.42%39 590
APTIV9.56%25 145
HYUNDAI MOBIS CO., LTD.--.--%19 262