Possible take-over target Pilkington predicted a 20 per cent rise in half-year profits as it remained on track to meet expectations for annual results.
The glass-maker, rumoured to be a target of Japanese rival Nippon Sheet Glass, said in a trading statement that market conditions were challenging but reported trading improvements for its core divisions of building products and automotive.
Speculation last week sent shares in the group soaring to a seven year high, but industry analysts played down the possibility of a bid.
Pilkington said in May that its Kings Norton factory in Birmingham, which employs about 500 people and manufacturers automotive products, had a strong future despite the loss of business following Rover's collapse.
In yesterday's statement Pilkington said its financial performance was being helped by further manufacturing efficiencies and cost cutting.
It expected first-half profits to rise by a fifth, although this performance was helped by the timing of money banked from the licensing of its technology.
Analysts have pencilled in a profits figure of £196.2 million for the 12 months to the end of March, compared with £184 million a year earlier.
The performance reflects a drive to make the business more competitive, following the loss of around a third of its workforce over the past decade.
The group, which employs about 24,000 people, is now expected to look for profitable growth opportunities as part of the final phase of its recovery programme.
In the building products division, Pilkington said revenues were up five per cent despite conditions remaining competitive and the UK market being soft.
Rising energy and raw material prices put pressure on input costs but were offset by cost reduction and efficiency efforts as Pilkington forecast a ten per cent improvement in first-half profits from the division.