UPDATE: Bodycote Rises As 2010 Earnings To Beat Market Views

9th Jul 2010 10:37

(Adds detail, analyst comment.) By Hannah Benjamin and Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Shares in Bodycote PLC (BOY.LN) rose sharply Friday after the engineer said 2010 earnings will be significantly ahead of market forecasts. Bodycote, which specializes in heat treatment to improve the wear resistance of metals, said it has experienced a steady and broad-based improvement in demand since April and revenue for the first six months of the year is expected to be 8% higher than the same period in 2009. The company added that its earnings are benefiting from a restructuring program it began in late 2008. The company shut factories, laid of staff and closed down some production lines to deliver savings of GBP30 million in 2009. Another GBP43 million of savings are expected in 2010, Bodycote said in its 2009 annual report. Bodycote said demand remains uncertain and uneven. But it added that if current levels of demand are sustained in the second half of 2010 then it expects operating profit for the year to be significantly above analysts' highest estimates. Analysts' 2010 operating profit forecasts range from GBP27.2 million to GBP34.7 million, Bodycote said. At 0922 GMT, shares in Bodycote were up 20.8 pence, or 11%, at 211.5 pence, outperforming a 0.3% higher Dow Jones U.K. Smaller Companies index. The stock has gained almost 30% since the start of the year. Analysts at brokerage Investec said they intend to upgrade their 2010 earnings forecasts by 35% and their 2011 forecasts by 15%. However, they maintained a "hold" rating, saying they will review their recommendation after Bodycote publishes its interim results. "But our view is becoming more positive," they added. -By Hannah Benjamin and Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [email protected] (END) Dow Jones Newswires July 09, 2010 05:37 ET (09:37 GMT)