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Engineer Meggitt signals softer 2019 after strong first quarter

(Reuters) - British engineering company Meggitt Plc reported organic revenue growth of 9 percent in the first quarter, but warned it would face tougher comparisons for the rest of 2019 and the potential for air traffic growth to moderate.

Meggitt is a key supplier to Airbus and Boeing Co, which has said it would cut production of its 737 MAX aircraft as it struggles with the worldwide grounding of the narrowbody jet following two fatal crashes in less than five months.

Meggitt, which supplies aerospace components and wheels and brakes for military fighter programmes, on Thursday said it was also mindful about the unsteady demand for defence products.

Meggitt said civil aerospace revenue grew 7 percent in the quarter on an organic basis, while defence revenue rose 18 percent, boosted by demand for engine composites, brakes and training systems.

Revenue at Meggitt's energy unit was hurt by lower demand in the nuclear sector, it said.

The company stuck to its forecast of underlying operating margin growth of between 0 to 50 basis points in 2019. Meggitt has said it would take around two years before its operating margins significantly improve.

Meggitt's margins have been dragged down by its Polymers and Composites unit, part of the business that makes sophisticated engine parts which can withstand high temperatures from composite materials.


(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr)