Smiths on track despite mixed trading in third quarter

Smiths Group, the global technology firm listed on the FTSE 100, said that its full-year guidance remains unchanged after underlying revenues and profits in the first three quarters were ahead of last year.

The company said that margins in all divisions except one improved on last year. "Overall, expectations for the year remain in line with the outlook given at the interim results in March, albeit with a slightly different mix by division," the firm said on Friday.

The outlook for the John Crane division - providing services for major process industries including oil. gas and power generation - has improved over the last few months. The company had previously warned of slower demand in the second half but said on Friday that the unit delivered "sustained underlying revenue growth" and higher order book than last year.

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Continued sales growth was also seen in the medical device and equipment subsidiary, Smiths Medical, though profitability was behind last year due to additional investment as well as the introduction of the US medical device tax in January, which the company warned about in March.

Smiths Detection, which makes sensors to detect explosives and other dangerous materials, saw an improvement in both the top and bottom lines. However, the company said that second-half sales and margins will be affected by timing issues with some contracts, "reflecting pressures on government spend and delays to airport infrastructure programmes".

The electronic components division, Smiths Interconnect, is expected to have a "challenging" final quarter, despite delivering underlying growth in the first nine months, due to a strong prior-year comparator and uncertainty in several end market "particularly with on-going weakness in Europe and the risk of US defence budget cuts".

Meanwhile, things were a little brighter at the fluid management unit, Flex-Tek, where the company has seen growth in revenue and profit due to a strong performance in aerospace and US residential.