Profit warnings take their toll again

Dublin report:The Iseq returned to tougher trading conditions yesterday as profit warnings continued to weigh heavily on stocks.

Trading updates from DCC and Readymix warned the market to prepare for profits that were less than analysts had expected.

The day's trading was helped little by weak data from the US in the afternoon, which revealed that the non-manufacturing sector had contracted for the first time in five years in January.

European stocks reacted negatively to the news, with the Iseq no exception. Traders said buyers deserted the market in the afternoon as the index slipped more than 4.25 per cent, falling 293.5 points to finish at 6615.63.

Those stocks with heavy exposure to sterling and the US were among the hardest hit.

In an interim management statement yesterday, DCC reported that its operating profit would be hit by the weaker sterling rate against the euro to the tune of €3 million. Stock fell by more than 7.3 per cent, sliding €1.38 to €17.50 by the close of trading.

Readymix slipped 12 cent to €1.40 after it issued a profit warning early in the day.

There was bad news for other building stocks too. After adding over 2 per cent in yesterday's trading, building materials group CRH saw its stock slip 7.9 per cent, losing €2.125 to €24.775 on the US data, and news that US construction materials firm Martin Marietta Materials had reported falling profit in the fourth quarter and a cautious outlook for the coming year.

The financials were hit too, with Irish Life & Permanent the worst casualty, sliding €1.072, or 9.34 per cent, to €10.40.

There was better news for Blackrock International, which saw its share price climb 2.86 per cent, or 1 cent, to 36 cent.

Aer Lingus also rose, adding 1.41 per cent to finish at €2.303.