Smiths Group Plc’ share price down, warns for lower results of its detection unit due to decreased customer demand

The technology company Smiths Group Plc, which manufactures a variety of products and services for the energy, security, medical, and communications sectors, made an official announcement today, revealing its expectations for its annual results. The company has a long history, as it started operating as a watch manufacturer in 1851. Now the products range vary from industrial seals to medical devices and detectors.

Smiths Group Plc said in its official announcement, which was cited by the Wall Street Journal: “Smiths Detection faced further challenging trading conditions during the third quarter. Underlying revenue declined in the nine months primarily reflecting weaker demand from cargo screening and transportation, albeit against a strong comparator period.”

The company shared its full-year profit forecast of its detection unit, and warned that it will be 25 million pounds (42.2 million dollars) lower than the expectations due to the fact that Smiths Groups revenue was affected by weaker customer demand.

Smiths Group also said that the full-year profit of its other units was in line with the initial forecasts. The company was proud to reveal that its John Crane unit, which operates in the oil and gas sector, has reached record levels of growth.

According to the companys statement, the profit hit for the unit responsible for manufacturing sensors used for detection of biohazards, explosive and chemical agents, includes a working capital adjustment that amounts to 12 million pounds and other 9 million pounds from lower volumes.

As reported by the Financial Times, one of the analysts, who work at Espirito Santo – Mr. Matthew Spurr commented on the warning made from Smiths Group in a note, saying: “Bulls can try to latch on to new Detection management as a pointer to a recovery that can take place further down the road, but it is clear that this division has become a lumpier and harder to forecast business that some elements of the market are prepared to accept.”

Smiths Group Plc was losing 1.14% to trade at 1 300 pence per share by 12:01 GMT, marking a one year change of -0.57%. According to the information published on the Financial Times, the 17 analysts offering 12-month price targets for Smiths Group Plc have a median target of 1,240, with a high estimate of 1,536 and a low estimate of 1,150. The median estimate represents a -5.70% decrease from the last price of 1,315.