GenCorp expected

to post quarterly loss

GenCorp Inc., a Sacramento, Calif.-based automotive parts and aerospace company, has already warned investors that its third-quarter results being released today will be in the red, and not be the profit it had previously anticipated.

Early last month, GenCorp said it expected to report a third-quarter share loss of between 4 and 8 cents (U.S.), compared with its earlier forecast of 4 to 6 cents.

Although the quarter is expected to be weak, GenCorp. expects to make a profit of between 41 and 46 cents a share for the year ending Nov. 30, according to Reuters Research.

The shares of New York Stock Exchange-listed GenCorp closed Friday at $9.07 each. The stock traded at a 52-week high of $10.49 on Sept. 2 and at a 52-week low of $6 on March 13.

GenCorp, which had sales of $1.14-billion in fiscal 2002, got 36 per cent of its revenue from Ford Motor Co. and General Motors Corp. and 22 per cent from the U.S. government.

About 71 per cent of its sales are in the automotive business, while 24 per cent come from aerospace and 5 per cent from chemicals.

GenCorp's GDX Automotive division manufactures extruded and moulded rubber and plastic body and window seals. GenCorp attributed its expected third-quarter loss to a slowdown in this division's business because of lower-than-expected sales to Volkswagen AG, new product launch costs and business weakness in Europe.

Its subsidiary, Aerojet-General Corp., manufactures rocket propulsion systems and precision weapon components. Profit in this division is expected to improve.

In the second quarter, Terry Hall, GenCorp president and chief executive officer, told shareholders the company will also improve its profit by selling real estate.

Quiet week for data

No major economic data are due out today.

However, bond traders in the United States will be looking at the details on the proposed sale of about $18-billion (U.S.) in five-year Treasury notes and $7-billion in 10-year Treasury inflation-indexed securities, otherwise known as TIPS or Treasury inflation-protected securities. The auction takes place on Wednesday.

In Canada, the only numbers scheduled for release today are the building permit numbers for August. BMO Nesbitt Burns Inc. expects that building permits in August declined 1 per cent, compared with a 3.3-per-cent rise in July.

The rest of the week also looks like it will be fairly quiet, at least on the economic front.

Today is the Yom Kippur holiday. Consumer credit numbers will be released in the United States tomorrow and wholesale inventories on Wednesday.

The data flow in the United States picks up a little on Thursday with the release of the weekly unemployment claims and the import/export prices. On Friday, economists will have the producer price index to mull over.

All in all, that doesn't look like enough to keep U.S. markets rolling ahead as they did last week.

In Canada, the Ivey Purchasing Managers index is scheduled for release tomorrow, while housing starts numbers are due Wednesday and labour force statistics on Friday.

These reports could influence the Bank of Canada's interest rate decision on Oct. 15.