The Week Ahead: Charts could steer Warner Chilcott into a storm

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Over the past few weeks hedge funds have been busy targeting stocks that look vulnerable on a chart analysis, and Warner Chilcott, the pharmaceuticals group formerly known as Galen Holdings, looks particularly so ahead of its third-quarter results tomorrow. Those who follow charts (a company's share price plotted as a graph) focus on a stock's past performance and use it to predict the future, and on this basis Warner could quickly find its share price falling to the 500p level or lower if its results disappoint.

Warner shares closed at 554p on Friday, having dropped from a high of 870p in March. That drop means they are without doubt on the radar of hedge funds, which last week savaged, the online travel group, after poor results. Like Warner, its share price had been in retreat for some time and so was ripe for an attack.

The market is expecting a fall in sales of about 15 per cent to $115m (£63m) from Warner. Earnings are tipped to fall 5 per cent to $55m. This sales and earnings dive is mainly due to disposals over the past year. As ever with a pharma company, an update on new drug launches will be of great interest to investors.

TODAY: First-quarter results from British Airways will bring further evidence of aggressive cost cuts at the airline. However, profits are unlikely to see the boost that they should have, due to soaring fuel prices and pension increases. Brokers expect pre-tax profits of £80m from BA and many are hoping for a resumption of dividend payments this year. Whether this is still possible, given the pressure on the company's cost base, only time will tell.

Surprises are unlikely to emerge from Marconi's first- quarter results, according to Gerrard. It predicts that the telecom equipment maker will post a pre-tax loss of about £13m, compared with profits of £3m for the same period last year. Marconi knows from painful experience that too much debt is bad news and has been aggressively paying down its borrowings. It should boast a net cash position of almost £400m.

Results: Full year - NWF Group. Interims - British Airways; Headlam Group; Management Consulting; Marconi; Morgan Sindall; Workspace Group.

TOMORROW: Dresdner Kleinwort Wasserstein was heard warning clients last week that interims from Old Mutual are unlikely to excite. Dresdner downgraded its rating on OM from "buy" to "hold" and argued that the stock's valuation is no longer compelling after its recent strong run. "We expect the interim results to be mixed, with strong figures from the US offsetting a lacklustre performance in South Africa," the German broker said. It fears OM is not seeing the anticipated pick-up in life insurance sales in South Africa.

Results: Full year - Northern Recruitment; Stagecoach Theatre. Interims - Warner Chilcott; Rok Property Solutions; Old Mutual.

WEDNESDAY: The appearance of Formal Property Management Services as one of Homestyle's biggest shareholders has set tongues wagging in the Square Mile. Apparently, the Jersey-based investment group has a history of taking large holdings in companies just before they are bid for. Homestyle was the subject of takeover speculation for months before Formal Property emerged with its holding but, following its involvement, questions about the retailer's future will take centre stage when it announces full-year figures. The group is tipped to post pre-tax profits of about £10m, down from £28m.

Results: Full year - Homestyle; KS Biomedix. Interims - Balfour Beatty; Nichols; Xenova.

THURSDAY: It is boom time for Xstrata at present. All of the mining giant's key commodities - copper, thermal coal and coking coal - are enjoying record prices, thanks to Asia's seemingly insatiable appetite for these commodities. Williams de Broe expects net income for the first half of Xstrata's year to soar to $343m from $81m. What the group will do with its growing cash pile will be of interest to analysts. The company does not have any major development projects in the pipeline, so acquisitions are likely to feature in the medium to long term.

Things are improving at P&O. The ports and ferries giant looks set to unveil a strong return to the black for the first half of its financial year. Gerrard believes pre-tax profits could come in as high as £50m, compared with a loss of £10m last time. The main drag on P&O's performance will be the continued weakness of the dollar and the tough competitive environment faced by the company's ferries. P&O Nedlloyd, now an associate company in which P&O has a 25 per cent stake, is doing well thanks to a buoyant trading environment.

Results: Full year - None. Interims - CD Bramall; Countrywide; P&O; Royal & SunAlliance; Xstrata.

FRIDAY: Results: Full year - None. Interims - Schroders; Portmeirion Group.