1st Nov 2013 07:42
LONDON (Alliance News) - Aerospace and defence company Meggitt PLC Friday cut its full-year revenue outlook after warning that trading in the third quarter had been slightly below expectations due to production problems at its sensing unit and due to the timing of contracts in its energy business.
The company said it now expects 2013 revenue growth to be in the low-single digits, compared to its previous guidance for mid-single-digit growth. It is still predicting revenue growth of mid-single-digits in 2014.
The company also warned that its has recently identified a raw material supply issue relating to one product type dating back to 2012, and has set aside GBP20 million to cover potential financial losses for fixing the problem.
"A solution is in place, including where necessary the replacement of the relevant parts over the next few years," it said in a statement without giving any more details about the product or problem.
It said it had now completed the integration of the PacSci business it bought in 2011 and had achieved USD25 million in synergies, above its original target of USD18 million.
Meggitt, like aerospace peers, has been seeing strong demand for components from the civil aerospace market as the likes of Boeing and Airbus deliver aircraft at record rates, but it has been hit by a slowdown in military spending in key countries like the US and UK.
The company said that situation is continuing, while it said prospects for its energy business remain "very encouraging".
By Steve McGrath; [email protected]; @SteveMcGrath1
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