Companies reporting next week

CONFIDENCE on the London market should be severely tested next week as the second quarter earnings season gathers pace with results from heavyweight companies including

Banking group Abbey National's problems following its profits warning last month will be further highlighted when it issues half-year results on Wednesday.

The corporate-based wholesale division is at the root of Abbey's difficulties after seeing bad debt provisions spiral - meaning in part that half-year profits will fall, according to estimates from fund manager Gerrard, to £756m from £969m a year earlier.

The results are likely to be presented by chairman Lord Burns after chief executive Ian Harley stepped down today following four years in charge of Britain's second biggest mortgage lender and 25 years overall with the company.

Shares in pharmaceuticals group GlaxoSmithKline have fallen sharply in recent weeks amid concerns about whether its pipeline of products is sufficient to make up for those about to lose patent protection.

Despite this and the impact of the weakening dollar, the world's second largest drugs company should deliver mid-teens earnings growth in its second quarter figures, due to be announced on Wednesday. Overall, pre-tax profits will be broadly unchanged at £1.7bn.

The performance is also likely to be affected by the slowdown in the growth of its asthma drug Advair, while the company is also threatened by generic competition to its antibiotic Augmentin.

On Thursday, a slimmed-down BT will publish first-quarter results. This is the telecom group's first full year since mmO2's demerger and the City will therefore be looking at the sequential performance rather than any misleading year-on-year comparatives.

Analysts are expecting figures in line with the previous quarter and Gerrard believes pre-tax profits will come in at £400m.

Conditions have been tough for life insurers such as Prudential, which posts interim figures on Wednesday. Crashing equity markets, exposure to collapses such as WorldCom and losses on its bond portfolio have all played a part, and analysts are expecting operating profits of £607m against £653m last year.

But Prudential has reported a 3% hike in first-quarter new insurance business and the City will be looking to see if this has continued into the second.

Key areas for growing market share at HBOS, created out of Halifax's merger with Bank of Scotland, are mortgages, credit cards and current accounts.

But some analysts want to know how much of this growth - in a highly competitive market - is happening on a profitable basis and if new business wins are loss-leading.

They will be hoping for more details on Thursday, when the banking group posts interim figures. Gerrard is forecasting pre-tax profits to remain broadly unchanged, dipping slightly from £1.44bn to £1.42bn.

Coach, bus and train operator Stagecoach issued a trading update in April which suggested that annual profits before tax and one-offs will be in line with hopes on Monday at £104m. The figure last time was £123m.

Interest will instead be focused on the state of negotiations with the Strategic Rail Authority concerning the renewal of the South West Trains franchise and compensation payments following disruption to the Virgin Rail joint venture caused by the upgrade of the West Coast Mainline.

Perth-based Stagecoach has been boosted by a revival in passenger numbers but took a £9m hit in the second half of the year because of strike action called by the RMT union on its South West Trains franchise.