Meggitt trims revenue growth forecast after tough quarter

Reuters

LONDON, Nov 1 (Reuters) - British aircraft parts supplierMeggitt lowered its full-year revenue guidance aftertrading over the last four months had been slightly below itsexpectations.

The supplier of avionics and wheels to planemakers includingAirbus and Boeing, said on Friday it now expectsto report 2013 revenue growth in the low single digits. InAugust Meggitt said it expected to deliver mid-single-digitrevenue growth for the year.

Prior to Friday's statement Meggitt had on average beenexpected to report revenue of 1.69 billion pounds ($2.72billion) this year, according to a Thomson Reuters poll of 14analysts.

But the company said trading in the four months to Oct. 31had fallen "slightly below expectations, principally due toshort term production difficulties at Meggitt Sensing Systemsand the timing of contract wins and project milestones in one ofour energy businesses."

It added that the strengthening of sterling against the U.S.dollar in the second half of the year had also had a negativeimpact.

Meggitt also said it had recently identified a raw materialsupply issue relating to one product type dating back to 2012.It said a solution was in place, including where necessary thereplacement of the relevant parts over the next few years.

"The cost of this issue is uncertain but we are providing 20million pounds to account for the expected total financialexposure over the coming years," the company said.

Civil aerospace after-market revenues continued theirgradual recovery, rising 2 percent year-on-year in the thirdquarter, while military revenues were flat, it said.

The civil aerospace market remains strong, said Meggitt,adding that the military outlook was still uncertain due to thelack of visibility on sequestration in the U.S.

Meggitt said its 2011 acquisition of PacSci had achievedtotal synergies of $25 million, against its original target of$18 million.

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