Another warning from a defence company has seen Ultra Electronics lose nearly 6% of its value.
The company, whose products include safety devices in aircraft, nuclear controls and submarine sonars, said it was facing "a number of headwinds." In particular, the recent US government shutdown has led to delays in orders, approvals and payments. In Oman, its contract has seen further setbacks, with the installation phase pushed back from the fourth quarter of this year until next year.
As a result, Ultra said 2013 revenues would be slightly below last year's figure, and its shares have slumped 110p to £17.86. Chris Dyett at Investec said:
Ultra's statement reflects the challenging market conditions in the US as well as delays in the installation of equipment under the Oman contract. We have cut our 2013 and 2014 earnings per share forecasts by 4% and 7% respectively. We are not surprised by the cuts to forecasts and continue to back management to do the right things to drive long term shareholder value. Our new price target is 1960p and we move to add (from buy).
The likes of Cobham and Meggitt have warned in recent days.
Heading in the other direction was animal genetics company Genus, up 42p at £12.90 after an upbeat trading statement. Charles Hall at Peel Hunt said:
We expect Genus to see stronger growth in the second half. The company is forecasting full year profit growth of mid-high single digits in constant currency having been flat year to date. Furthermore, the acquisition of Genetiporc will start to contribute next year as the synergies are delivered. The rating now looks attractive given the prospect of stronger growth.
