Broker snap: Radar fuzzy at QinetiQ

28th Sep 2010 12:50

QinetiQ, the formerly state-owned defence technology firm, expects to meet market expectations this year but Investec still thinks there might be a bit of shaving of the numbers from analysts at the upper end of range of forecasts."The outlook remains extremely uncertain particularly against the backdrop of the UK's Strategic Defence and Security Review and in the US where spending priorities relevant to the group are under the spotlight," notes Investec analyst Andrew Gollan."Self-help restructuring measures underway afford some protection, but the financial performance of the group is still beholden to the risk of further contract delays," Gollan added. The company said in a trading statement on Tuesday that "decisions on orders continue to be delayed across the sector and visibility remains limited, particularly in the UK."Investec is leaving its full-year forecasts for 2010 unchanged, at least for now, but then its numbers are near the bottom of the range; Investec is predicting earnings per share (EPS) of 11.4p, whereas the median figure from a range of analysts' forecasts is 12.93p."For 2011, it is simply too early to make a confident call on forecasts (we currently estimate a broadly flat financial performance of 11.7p)," the broker said. Market consensus for 2011 is for EPS of 14.06p.