Irish company profits worse than previously thought
Irish company profits will be lower than previously anticipated this year as cooling economic growth curbs demand and costs increase, according to Dublin-based securities company Davy.
Earnings will drop around 13 percent in 2008 and 7.2 percent in 2009, Davy said in a report on last week's first-half results from around 20 Irish companies. In July, it forecast profits would drop 11 percent and 4.3 percent, respectively.
Davy analysts lowered forecasts on builders, banks and airlines as the Irish, U.K. and U.S. economies all head toward a recession and a combination of weaker demand and price competition erode profitability. Ireland's benchmark ISEQ stock index has fallen 34 percent this year and is the euro area's third-worst performer.
''We revised forecasts for 20 companies in August, with interim results being the primary catalyst for the changes,'' said analysts including Jim O'Neill in the note, published yesterday. ''As expected, the trajectory of the revisions continues to be downward.''
Aer Lingus Group Plc, Ireland's second-largest airline, said on Aug. 28 it had a first-half loss on surging fuel expenses and forecast that it will lose money this year. A day earlier, Paddy Power Plc, the biggest Irish bookmaker, cut its operating profit forecast by around 9 percent to 75 million euros ($108.6 million) as cash-strapped gamblers made smaller bets online.
Dublin-based CRH Plc, the world's second-biggest building materials maker, has said frozen financial markets and slumping economies will end 15 years of profit growth. (Bloomberg)
- Colm Heatley
