LONDON (ShareCast) - An early three-figure loss on Wall Street following weaker than expected GDP data quickly cancelled gains in London, leaving the leading index back in the red near mid-morning levels.

Investors fled BT following a 1% increase in first quarter underlying core earnings, just below forecasts, although the telecoms giant kept full year guidance unchanged. Earnings before interest, tax, depreciation and amortisation (EBITDA) before specific items and leaver costs inched up to £1.433bn.

A cautious Carphone Warehouse didn’t help, with expectations of an extra 200,000 to 250,000 broadband customers this year cut from previous forecasts of 400,000. Revenues at its UK fixed-line telecoms business are seen broadly flat versus the 4-5% growth.

Brewer SABMiller reported a 1.6% drop in underlying beer volumes in the three months ended 30 June, enough to knock the froth of its share price. Lager volumes were down 3% in South Africa.

HBOS rallied though despite seeing pre-tax profit slump 72% during the first half to £848m due to £1.1bn of negative fair value adjustments. Underlying profit before tax was 51% lower at £1.45bn, while Impairment losses increased by 36% to £1.3bn. Investors thought it could’ve been worse.

There are also gains for Anglo-Dutch publisher Reed Elsevier which remains on track to deliver its goals for the year. Interim pre-tax profit rose to £350m from £308m on revenue up to £1.97bn from £1.79bn.

Miners were helped by strong metal prices and figures from Antofagasta. It ramped up total copper production by 4% to 119,000 tonnes in the second quarter from the previous three month period and by 12% on the year before.

Anglo American announced record half year underlying earnings of $3.5bn despite a 9.7% drop in revenue to $17.9bn. It expects a strong second half. BHP Billiton, Kazakhmys and Eurasian Natural Resources are among the leaders.

Shell's second quarter earnings rose 5% to $7.9bn on a current cost of supplies (CCS) basis, with reported income 33% higher at $11.6bn. Boss Jeroen van der Veer called it "another set of competitive earnings". He said: "Good operating performance, combined with increased oil and gas prices, offset the impact of weaker downstream conditions in the second quarter 2008."

Centrica turned lower as operating profit from continuing operations fell 19% in the six months ended 30 June to £992m, although it called its interim a “good” set of results in tough market conditions. The British gas-owner, which yesterday hiked gas prices by 35% and electricity prices by 9%, reported a 17% rise in revenue to £10bn.

Unilever also fell back after the food and household goods giant reported a drop in profits as it felt the impact of restructuring costs, higher taxes and the strong euro.

Prudential reported a "strong" half year in challenging conditions, with new business Annual Premium Equivalent sales up 12% to £1.5bn and European Embedded Value (EEV) new business profit up 11% to £602m. The company expects Asian economic growth to remain strong but beneath the peak levels of recent years, althogh CEO Mark Tucker says "prospects for the group remain positive".

AstraZeneca and Shire, the UK’s second and third ranked drug firms, both increased full year guidance. Astra core annual earnings per share by 15 cents following better than expected second quarter numbers, while Shire’s second quarter revenue leapt 35%. It upgraded guidance for 2008 revenue growth to at least 20% from mid to high teens previously.

Meanwhile, Next is constrained by tough trading conditions, SG Securities said as it lowered its recommendation on the fashion retailer to ‘sell’ from ‘hold’ after Wednesday’s trading statement.

Morgan Stanley has cut its target price on Schroders to 975p from 1,160p after reducing its earnings per share estimates on the fund manager by 10% for 2008 and by 8% for 2009.

RBS has lifted its target price on Arm Holdings to 93p from 83p, saying that the microchip designer’s physical intellectual property division may be turning around.

The fourth quarter saw BSkyB add 92,000 net new customers, well ahead of forecasts, with another 200,000 broadband customers also better than expected. Year adjusted operating profit was £752m on revenue up 9% to £4.95bn, in line with forecasts.

Lucky Strike and Benson & Hedges maker British American Tobacco rolled out a 16% hike in half year profit after strong demand from emerging markets such as South Africa and Russia. Pre-tax profit rose to £1.83bn for the six months 30 June 2008 from £1.59bn the year before on revenue up 15% to £5.46bn.

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