The Weekend Economists' Panglossian Pandemic January 20-22, 2012

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79. Profit warnings rise at fastest rate in 10 years {uk}

http://uk.reuters.com/article/2012/01/22/uk-ey-profit-warnings-idUKTRE80L0D520120122

(Reuters) - Profit warnings from companies jumped more than 70 percent in the final three months of 2011, the biggest quarterly rise for a decade, as markets were rocked by economic uncertainty, Ernst & Young said on Sunday.

Companies quoted on London's main list and junior AIM market issued 88 profit warnings in the final quarter, up from 51 in the third quarter, the accountancy firm said.

"As evidenced by the sharp jump in the number of warnings, 2011 was a tough year for many companies and this year is likely to continue in the same vein with the gap between the winners and losers widening," said Alan Hudson, head of Ernst & Young's UK restructuring practice.

"Many businesses are still expanding profitably, but others - the zombie companies - remain moribund by debt or defunct business models, unable to build value or gain momentum in these challenging economic conditions."