After reporting a 17-percent surge in underlying pretax profit of EUR578 million ($961.25 million) in 2013, British supplier GKN expects higher gains this year that would offset the effect of a weak dollar versus the pound. GKN expects its auto business to grow at a faster rate than an anticipated 3 percent gain in the market this year.
The company added that its aerospace unit would post higher sales in 2014. GKN was able to exceed a company-supplied consensus forecast of GBP565 million, thanks to a strong performance in its automotive business, which accounted for about 45 percent of sales.
"The dollar is going to be a headwind. It's been a tough start," GKN chief executive Nigel Stein said, noting that a 1-percent move in the dollar would have around a GBP4 million ($6.65 million) impact on profit. He, however, expressed confidence that GKN could offset that.
"This should be outweighed by the benefits from the group's diverse exposure to global markets, strong customer positions and healthy order books," Stein added. Shares in GKN dropped over 2 percent a day after results were published. Analysts attributed the drop partly to the stock's strong run as the shares have surged 11 percent since the start of 2014 and 64 percent in the last 12 months. [source: Reuters]