12th Nov 2015 07:36
LONDON (Alliance News) - IMI PLC on Thursday said it expects its earnings will be at the low end of market estimates for 2015 as tough conditions continued in its markets in the third quarter.
The FTSE 250-listed engineer, which makes flow and fluid control products and heating and cooling systems, said organic revenue for the three months to the end of September was down 5.0%, with revenue falling 7.0% on a reported basis due to adverse currency movements, partially offset by acquisition contributions.
IMI said that, based on trading in the year to date, organic revenue and margins will improved in the second half of 2015 against the first but will be lower year-on-year, leaving the group's adjusted earnings per share set to come in at the low end of market expectations.
IMI said it is considering a number of potential cost-cutting initiatives to try to offset the issues and said the restructuring it plans to undertake will impact the short-term performance of its Critical Engineering and Precision Engineering businesses.
In the third quarter, Critical Engineering revenue fell 6.0%, offset by lower project work in its power business, despite relatively robust aftermarket sales. Precision Engineering revenue fell 8.0% in the quarter, hit by weaker activity in North America and Brazil along with continued challenges posed by the oil and gas industry downturn.
Hydronic Engineering revenue for the quarter fell 7.0%, hit by the weak euro and mixed trading conditions in Europe.
By Sam Unsted; [email protected]; @SamUAtAlliance
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