Analysts took the red pen to estimates after Cookson warned that its second half would be "slightly" weaker than the first following a slowdown in global steel production and ongoing weakness in the US jewellery market.
Of greatest concern is the core ceramics division, which generates almost 60 per cent of group revenue. There has been no drop in activity levels there yet, but output from the global steel industry, which accounts for about a third of annual sales, was down 2 per cent in the third quarter from the previous three months. And Cookson, which makes consumable products for the steel production industry, said news from its customers is mixed. Volumes are expected to continue deteriorating at the smaller solar power business into next year, too.
Still, demand for smartphones and tablet devices is driving sales growth in electronics and new product launches are creating interest. Cookson only expects the precious metals business to break even in the current six months given losses in the US, but the division only makes up a 10th of group sales and it may decide to close the US operations, or even sell the entire division, when the results of a review are published in February.
