* Blue-chip FTSE 100 index falls 0.4 percent
* Petrofac (Frankfurt: A0HF9Y – news) slides 15.9 pct after profit warning
* IAG hit by post-results profit-taking
* FTSE 100 about 2 pct away from record high
By Tricia Wright
LONDON, May 9 (Reuters) – Britain’s top share index slipped from a 10-week high on Friday, led lower by Petrofac as a profit warning from the energy services group added to signs of poor corporate earnings that have kept the market’s rally in check.
Petrofac sank 15.9 percent after warning its 2014 net profit would fall by as much as 11 percent to between $ 580 million and $ 600 million due to a poor performance from its Integrated Energy Services division.
Analysts highlighted that weak results are being punished more than they would have been in the past, in the wake of a powerful rally in 2013 in anticipation of encouraging earnings.
Around two thirds of companies listed on the pan-European STOXX Europe 600 index have posted first-quarter updates so far, of which half have missed consensus earnings forecasts, according to Thomson Reuters StarMine data.
But while this has left valuations looking full, a recovering U.S. economy should help pick up the slack, with a drop in initial jobless claims on Thursday the latest sign that the labour market there was improving.
The FTSE 100 index trades on a 12-month forward price/earnings ratio of around 13 times, against its 10-year average of about 12 times, Thomson Reuters Datastream shows.
“Individual share prices are likely to react very poorly when you have a profits warning like (with) Petrofac… but the overall market is likely to be driven higher by improving economic momentum out of the U.S,” Gerard Lane, equity strategist at Shore Capital, said.
The broader FTSE 100 index had fallen 25.32 points, or 0.4 percent, at 6,813.93 points by 1338 GMT, after rising to a high of 6,840.37 on Thursday, its highest since late February.
BETTER TO TRAVEL THAN ARRIVE
International Consolidated Airlines Group was the second-top FTSE 100 faller, off 5 percent, as investors locked in profits on the British Airways owner which has risen around 40 percent in the last 12 months.
IAG unveiled better-than-expected first-quarter results on Friday, with a halving of losses at troubled Spanish carrier Iberia putting it on course for a rise in annual profits.
“There was a lot of good news in that price. The figures I think were pretty good really – there’s nothing of any major issue,” Galvan’s head of trading Ed Woolfitt said.
While the broader market came under pressure on Friday, it was just some 2 percent away from its all-time high set in December 1999 and charts suggested it had the potential to set new highs in the near future.
FOREX.com technical analyst, Fawad Razaqzada, said that a close above 6,835, a level at which the index is currently encountering resistance, should pave the way for further gains.
“It is just a matter of time before we revisit or surpass the previous record highs,” he said. (Additional reporting by Atul Prakash; Editing by Toby Chopra)