STOCKS NEWS EUROPE-Bodycote shares sink on profit warning

Bodycote (BOY.L) shares drop 15.4 percent after the British engineer says it will miss analysts' 2009 consensus earnings forecast if demand remains at current depressed levels.

"Today's trading update for H1 2009 is substantially worse that we would have expected and we anticipate that our earnings estimates for this year, and probably next year too, will be reduced by at least 25 million pounds in profits and 10 pence in EPS," says Arbuthnot analyst Michael Blogg.

"In the medium term, we expect the current extreme shakeout in manufacturing industry to generate a trend towards the use of outsourced services, such as those provided by Bodycote," he adds, though in the short term he is removing his "buy" recommendation on the stock.

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