The Week Ahead: Corus seeks to halt corrosion as steel prices lose their shine

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The bad news from the high street has been hard to miss in recent months, but now it's the turn of another sector to contribute to the growing gloom descending on the British economy. On Thursday, Anglo-Dutch steelmaker Corus will warn of a slowdown in its earnings for the rest of the year.

The bad news from the high street has been hard to miss in recent months, but now it's the turn of another sector to contribute to the growing gloom descending on the British economy. On Thursday, Anglo-Dutch steelmaker Corus will warn of a slowdown in its earnings for the rest of the year.

Corus's chief executive, Philippe Varin, will sound the warning when he provides a trading update at the company's annual general meeting. He is expected to say that earnings growth for the second half of the year will slow because of falling steel prices on the back of weakening European demand.

The company was confirmed last week as one of two stocks being kicked out of the FTSE 100, and the latest news is likely to depress its shares further. Analyst predictions for Corus's 2005 full-year earnings (before one-off costs, tax and interest) range from £900m to £1.2bn.

Adding to the negative sentiment will be a host of economic data, including figures for inflation, May retail sales and employment. "It's quite a key week," says John Butler, an economist at HSBC. "Retail sales data tells us where we are today and the labour data where we are heading."

Mr Butler expects retail sales to have risen just 0.1 per cent in May, which would be an increase of 1.7 per cent over the past year. The official data is likely to back up reports from retailers such as Boots, Next and B&Q owner Kingfisher, among others, which have recently complained of tough trading conditions.

The corporate newsflow will see various companies release results, casting further light on the health of the economy. Those reporting include tour operator First Choice Holidays, which will be seeking to shake off concerns that a slowdown in consumer spending could see potential customers choose to holiday at home rather than overseas. In its most recent update in late April, however, First Choice said trading had continued to progress well and that margins were better than a year ago.

Also reporting is Majestic Wine, the UK's largest chain of wine warehouses. It confirmed strong sales growth in its last update in January - but analysts will be watching closely to see if a slowdown in consumer spending has impinged on its performance.

Hoping to have some better news to impart is BT. The telecoms giant is trying to redefine the industry with the launch of a new mobile phone. Two years in the development, the device - called Bluephone internally - will allow users to make cheap calls over the internet from home.

The project is important to BT as it is a key part of its efforts to stem the decline in its traditional fixed-line network. Analysts also believe that the Bluephone may pose a threat to some of the mobile operators.

Several big overseas companies are reporting results this week, not least of which is Lazard. The 157-year-old investment bank, led by chief executive Bruce Wasserstein, finally sold 34.2 million shares in early May after months of internal squabbling. The float got away at the lower end of its price range, though it still raised $854.4m (£472m). Lazard's first set of quarterly numbers is expected to be upbeat, with the group set to benefit from an upswing in merger and acquisition activity.

Wall Street giants Goldman Sachs and Lehman Brothers are also releasing numbers.

Over in continental Europe, a maverick politician, disgruntled shareholders and a mountain of debt can point to only one thing: more trouble at Eurotunnel.

Friday's annual general meeting is the latest twist in the long-running drama at the Channel Tunnel operator, with the Eurotunnel board facing an attempted coup by French politician Nicolas Miguet. Mr Miguet, a convicted fraudster, wants shareholders to vote him on to the board and have its chairman, Jacques Gounon, replaced.

Eurotunnel, which is groaning under £6.2bn of debt, must do a restructuring deal with its banks or go bust. But Mr Miguet's plans suffered a setback last Friday with the sudden resignation of the chief executive, Jean-Louis Raymond, who was rumoured to be an ally. However, most agree that shareholders have divided opinions about Mr Miguet, and the eventual result of the AGM is too close to call.

The other European company worth keeping an eye on is Dutch retailer Ahold, which was forced to restate its earnings in 2003. It releases first-quarter results, and expectations are for a solid rise in earnings. There are concerns, however, that aggressive pricing will prevent margins from growing.

CALENDAR

Tomorrow 13

UK: Results: (final) Carclo, ILX Group, Majestic Wine, PayPoint, Renold, Ten Alps Communications, Workspace Group.

Tuesday 14

UK: Results: (F) CML Microsystems, Focus Solutions, Goldshield Group, PHS Group, Radstone Technology, Warner Estate Holdings; (interim) ATH Resources, First Choice Holidays, Future.

Wednesday 15

UK: Results: (F) ITIS Holdings; (I) Civica.

Thursday 16

UK: Results: (F) TRL Electronics, Wyndeham Press.

Friday 17

UK: Results: none scheduled.

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