Newspaper article The Journal (Newcastle, England)

BA Expected to Report Rise in Interim Profits; Taking Stock in Association with RBS

Newspaper article The Journal (Newcastle, England)

BA Expected to Report Rise in Interim Profits; Taking Stock in Association with RBS

Article excerpt

Byline: By Iain Laing

BRITISH Airways and Tate & Lyle will be among firms reporting this week during another busy few days for corporate results.

Analysts are expecting a healthy increase in interim profits from British Airways on Friday despite a turbulent quarter for the company.

The company, which has more than 1,000 staff at Newcastle Business Park and Newcastle International Airport, hit the headlines in August after being hit with pounds 270m in fines from the US Department of Justice and Office of Fair Trading for collusion over passenger fuel surcharges.

But at the operating level, half-year numbers should benefit from comparison with last year's August terrorist scares, which caused the carrier serious disruption - costing it pounds 100m - as well as frustration for millions of passengers.

This summer's poor weather also hindered the carrier in July, while in September record oil prices will have put the airline's costs under strain.

Despite the problems, consensus forecasts for the carrier's half-year operating profits range from pounds 533m to pounds 563m, after the firm posted profits of pounds 263m for the first quarter back in August.

Collins Stewart analyst Andrew Fitchie estimates profits will be around 19% higher at pounds 548m. He said: "We'll be looking out for what they'll say about full-year guidance, and whether they reiterate their margin target, also the impact of higher oil prices and any costs they've managed to take out of the business."

Sugar and ingredients group Tate & Lyle has already braced the City for the worst from Wednesday's interim results after a profits warning in September triggered a dramatic collapse of nearly 30% in the company's share price.

Analysts slashed forecasts after the company warned of a host problems including a small loss for its sugars business, and flat half-year results for sugar substitute Splenda.

The weakness of the US dollar has also slashed profits by pounds 12m - with a further currency hit expected in the second half results. …

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