The Week Ahead: Astra investors face more heartache

Shareholders of AstraZeneca deserve some cheer after a disastrous 2004 for the pharmaceuticals giant, but if they are hoping for a quick reversal in the company's fortunes to be heralded at its annual results on Thursday they are likely to be disappointed.

Shareholders of AstraZeneca deserve some cheer after a disastrous 2004 for the pharmaceuticals giant, but if they are hoping for a quick reversal in the company's fortunes to be heralded at its annual results on Thursday they are likely to be disappointed.

Teather & Greenwood believes there is more heartache to come for AZ investors and urges them to exit the stock in the run-up to the figures.

"We believe there is further downside risk to the stock on publication of the results if, as we expect, the outlook statement fails to impress the market," warned T&G, which fears that downgrades to AZ's 2005 earnings forecasts are likely as a result of the numbers. Further falls in the group's share price is not what investors need, given the 30 per cent drop in the company's stock over the past 12 months.

Two major drug failures have been to blame for this. Last year, trials of AZ's lung cancer pill, Iressa, showed that users lived no longer than patients taking a placebo, while US regulators ruled that the company's new blood thinner, Exanta, is too dangerous to release.

To try to prevent such setbacks happening again AZ has appointed John Patterson, the former head of marketing and drug licensing, to review the way it conducts clinical trials. City analysts will certainly want to know what reforms he is proposing. In terms of the hard figures, the group is forecast to post pre-tax profits of $4.9bn (£2.6bn ) for 2004, up from $4.2bn.

TODAY: Results: Full year - Beal. Interims - Amino Technologies; ITM Power.

TOMORROW: Cable & Wireless's update is unlikely to see the telecoms carrier indicate any material change in its outlook. The trading environment facing the group in the UK continues to be tough amid fierce competition. Meanwhile, C&W is facing competition challenges in the Caribbean. Barbados and the Cayman Islands are undergoing a liberalisation of their telecoms industries, while growing use of mobile phones iseating into C&W profits out there. The group is expected to issue initial estimates of the effect of the tsunami disaster on its operations in the Maldives, though it is unlikely to impact the company's financials in a material way.

Results: Full year - Jelf Group; ML Laboratories; Porvair. Interims - Games Workshop; NCC Group. Trading statements - Cable & Wireless.

WEDNESDAY: Northern Rock kicks off the UK banks' reporting season. Talk surrounding the mortgage bank has suggested its full-year figures may disappoint but Gerrard believes this is unlikely. The broker reckons Northern Rock's previous trading statement hinted at an increase in market share in mortgages. Gerrard forecasts pre-tax profits at the bank to rise to £430m from £387m.

ARM Holding is tipped to announce a solid set of fourth-quarter numbers, coupled with an upbeat outlook statement for 2005. For the final three months of 2004, the semiconductor designer is forecast to see profits soar to £13.5m from £8.9m as demand for the devices that take its technology continues to rise. ARM makes money by licensing its technology to corporations, which pay a one-off fee. The group then receives a payment each time a device using its technology is sold. The City will also be keen to hear how it is getting on with the integration of its rival Artisan.

Results: Full year - ARM Holdings; Crest Nicholson; Northern Rock; Terrace Hill. Interims - Stanley Leisure. Trading statements - Vodafone.

THURSDAY: Those who follow radio stocks such as GWR, Scottish Radio, Chysalis, Capital Radio and Emap will be keenly awaiting the latest quarterly Rajars. These are the radio industry's official listening figures and they are forecast to show that the commercial radio sector is winning market share against the BBC. Among commercial players, the key battleground, as ever, is in London, between Capital Radio and Chrysalis, although Numis believes Emap could make this a three-way contest in 2005.

Meanwhile, mmO2 is expected to report a robust third-quarter trading update. The group's German operations are tipped to soar this year while subscriber growth is likely to exceed market expectations.

Results: Full year - AstraZeneca; Sanctuary. Interims - Eurodis Electron; Homestyle; Misys; Osmetech. Trading statements - mmO2.

FRIDAY: Results: Full year - None expected. Interims - Vedanta Resources; Whittard of Chelsea; BAA.