11th Nov 2013 08:05
LONDON (Alliance News) - Aeropsace and security technology company Cobham PLC Monday cut its outlook for next year, warning that budgets in key US defense and security markets were continuing to deteriorate.
The company kept its full-year guidance unchanged for 2013 unchanged after saying trading in the first 10 months of the year has met its expectations. It said weakness in its defence markets was being partially offset by strength in commercial aerospace markets.
It still expects organic revenue to be down by low-to-mid single digits this year and operating margins to be slightly below those reported in 2012. However, the company is now predicting that organic revenues will again fall by low-to-mid single digits in 2014, having previously predicted modest growth.
"Cobham will take further actions as appropriate to substantially mitigate the impact of organic revenue declines on the group's trading margin," it said in a statement.
It said it is expecting organic revenues to start growing by a mid-single-digit percentage from 2015 after it streamlines the business and makes operational efficiencies.
Like peers, Cobham has been hit hard by a slowdown in spending in US defence and security markets, which makes up just over a third of its total revenue. With the US government cutting spending across the board, the defence markets have come under pressure, especially as military action is being scaled back in many recent war zones.
Cobham shares were down 3.7% at 273.8 pence early Monday, the biggest fall in the FTSE 250.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright © 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
Cobham