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.

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.

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.

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020
The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020