Struggling Midlands telecoms equipment maker Marconi Corporation will be under pressure to show it can still win new business when it publishes first-quarter results later today.
Marconi lost over half of its value in late April when it failed to win any work on the £10 billion refit of BT Group's network, and investors will want to see how the group is coping following this very public snub from its largest customer.
"We look for further detail on discussions with its carrier customers and the likelihood of future contract momentum," said Lehman Brothers in a research note yesterday.
"Marconi needs to penetrate new markets or new network elements within existing accounts to drive revenue growth."
The former monopoly operator accounts for around a quarter of Marconi's revenues, and the equipment maker has already estimated it will lose £50 million of sales this year as BT begins switching suppliers.
Results for the three months to the end of June, though, will be little affected by this process.
Revenues are expected be in the region of £ 289 million to £300 million, compared to £289 million last year, while gross margins are seen dropping to around
31.5 per cent, compared to
32.5 per cent last year.
Thanks to the dwindling revenues from BT over the coming months, Lehman sees little scope for Marconi, which has a major plant in Coventry, to raise its guidance for flat revenues in the current financial year.
But over the longer term, the failure to secure any work on BT's 21st Century Network calls into question Marconi ' s viability as an independent player in a telecoms equipment market where size is considered key to long-term survival.
With Marconi management now exploring all of their "strategic options" many analysts believe that a takeover by a bigger rival is the most likely outcome for the business.
Marconi, which narrowly avoided bankruptcy back in 2002, is cutting 800 jobs in the UK, including 450 at Coventry, after missing out on the crucial contract with BT.
And analysts will also be anxious to see evidence of further cost cutting.