Engineering heavyweight GKN is expected to record a 14.8 per cent rise in revenues when it releases its annual results Tuesday.
Revenues are expected to reach £6.6bn for 2012, compared to £5.7bn posted the previous year.
Shares jumped a day ahead of the results but Nomura has advised investors to remain cautious following a decline in Europe car sales.
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"Although we are in-line with consensus for fiscal year 2012 and weakness in European auto demand has been well-flagged previously, the share price momentum is a slight concern to us, as car sales in Europe declined a further 9.0% year-on-year in January of this year, which we think will prompt a cautious outlook by GKN's management," Nomura analyst Juho Lahdenpera warned in a report released late last week.
"We take a cautious view on the shares heading into the numbers."
Nomura will be focusing on the management's outlook, particularly on how they intend to offset a possible further fall in European demand on Driveline's and Powder Metallurgy's margins.
January car sales in Europe dropped 9.0% year-on-year to all-time lows and the analyst anticipates total regional auto production to decline 4.0% for the fiscal year 2013, compared to the previous year's 2.0% year-on-year decline.
"In addition, the progress of restructuring in Aerospace to integrate Volvo is of interest to us," Nomura added.
"Consensus, like us, looks to give management full credit for its integration plans and any delays would be a downside risk to estimates. The ongoing safety reviews on Boeing's Dreamliner aeroplane are unlikely to have impacted Aerospace production to date, as we understand that Boeing has asked GKN to maintain production rates."
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