The number of profit warnings from large-cap European companies this year looks set to hit the highest level since 2003, warns Gareth Williams, equity strategist at ING (NYSE: ING - News) .

He notes there were 25 warnings in the first half of 2008, the most for five years, and that there have been a further five so far in the second half.

"Since 1996, 48 per cent of profit warnings have come in the first half and 52 per cent in the second half. Using the average to project forward suggests 52 profits warnings for the year as a whole; in other words, there might be another 22 to come."

However, Mr Williams warns that it is far more likely that the second half will see profit warnings coming through at a faster rate than in the first six months of the year.

"Bottom-up forecasts remain dangerously optimistic and our top-down models suggest that euro strength, high oil prices and consumer fragility will start to hit home in the coming quarters," he says.

"Certainly, the 2001-2003 experience suggests that profit warnings are front-loaded in relation to the earnings cycle."

Mr Williams says that, unsurprisingly, the banking, retail and technology sectors have dominated the list of warnings so far this year.

"Our top-down work on margins and earnings suggests that technology, industrials, autos and food & beverages may be the sectors that deliver unwelcome surprises in the second half."