Production problems and weak dollar hit Meggitt stock
Analysts have warned that the dollar’s drop against sterling threatens aerospace and defence results.
Meggitt, a provider of aircraft wheels and brakes, fell sharply after cutting its full-year sales forecast because of production problems and a weaker dollar hurting results in sterling.
The stock fell as much as 9.9 per cent yesterday, the biggest intraday drop since April 2009. Revenue this year will grow by low single-digits compared with a previous forecast of a mid-single-digit increase, the British company said.
Meggitt said it experienced “short-term” production problems at its sensing systems unit and also made a £20 million provision to reflect a raw material supply issue, whose full costs are uncertain.
UBS analysts have warned that the dollar’s drop threatens aerospace and defence results. As 60 per cent of Meggitt’s sales come from the US, a 1 cent move hit profit by about 0.4 per cent, UBS said. – (Bloomberg)