Why Balfour Beatty plc, Imagination Technologies Group plc and Legal & General Group Plc Should Lag The FTSE 100 Today

The main FTSE (INDEXFTSE:UKX) fallers are Balfour Beatty (LON BBY), Imagination Technologies Group plc (LON IMG) and Legal & General Group Plc (LON: IMG)

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After positive results from Aggreko and Aviva, the FTSE 100 (FTSEINDICES: ^FTSE) is stabilising near to a record high. At the time of writing the index has added 4 points to 6,780 with the nerves of investors — spooked earlier in the week after worrying signs Russia could exert military force in Ukraine — beginning to calm.

The leading riser is Aviva, up 9% on a strong profit performance, followed by Aggreko, up 8% after announcing a special £200m dividend windfall for shareholders.

Unless things suddenly deteriorate again in Ukraine investors’ eyes should instead stay focused on market fundamentals, while the FTSE 100 consolidates its position around 6,800, then onwards, of course, to new record heights.

Not every company did as well in this morning’s round of trading updates. At least a couple struggled pretty badly:

Balfour Beatty 

Balfour BeattyThe number one faller on the FTSE All Share is the construction group Balfour Beatty (LSE: BBY), whose shares fell 25p to 297p after a “disappointing” performance in 2013.

Profits slid 32% on a weak UK construction market and a downturn in the mining and resources sector in Australia. However, the chief executive cites improving market conditions in the UK and US which, over the long term, should feed into improved financial performance, while gains in 2014 are expected to be “modest”.

Shares in Balfour, which sealed a £154m deal to convert the London Olympic stadium into a football ground for West Ham, are still up 4% on the beginning of 2014.

Imagination Tech

Imagination Tech (LSE: IMG) is in second place, down 16p, or 8%, to 173p on a warning that the smartphone market is slowing down.

The microchip designer, whose share price surged earlier in the year after renewing a deal with Apple, cut costs to cope with lower unit shipments. Operating costs are expected to be between £127m and £131m, which is lower than previous guidance of £135m and £137m.

According to the chief executive, Hossein Yassaie, these events are merely “transient”. 

Legal & General

Pound CoinsWe’ll finish things off by looking at Legal & General (LSE: LGEN), one of the blue-chip laggards today, trading down almost 2% at 232p. At first glance, the latest yearly report looked quite good, with a jump in profit of 10% to £1.1bn. And the dividend hiked 22% on strong cash flow gains.

So far so good what are they hiding?

Always beware of large bold typeface proclaiming bumper figures in a company announcement. A small miss in expected operational profit was flagged by analysts as the reason investors began to run away.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Mark does not own shares in any company mentioned. The Motley Fool owns shares in Imagination Technologies.

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