Sector movers: Aero/defence hit by US concerns after Ultra Electronics update

15th Nov 2013 15:42

Aerospace and defence stocks were being sold off on Friday after Ultra Electronics became the latest company in the sector to be hit by concerns over government funding in the States.The defence, transport and energy products company said that due to a "number of headwinds, mainly in the US government-funded market", revenues in 2013 will be slightly below last year's.Ultra said in a statement: "In the US government-funded market, the unexpected shut-down in October further impacted the federal procurement process, delaying expected orders, approvals and payments." Meanwhile, the ongoing budget cuts across the government - otherwise known as sequestration - continue to affect the business, the company said.The prolonging of its Oman contract also continued, with further delays in accessing buildings. As a result, Ultra's installation phase has now been deferred from the fourth quarter of 2013 until next year.The stock was down 3.69% at 1,826p.Investec reacted to the update today by cutting its rating for the stock from 'buy' to 'add' with analyst Chris Dyett saying that management's comments were "slightly below [estimates] although we were modestly above consensus forecasts".Negative read-across from the statement was affecting others in the sector on Friday with many aerospace and defence stocks heavily exposed to the US public sector. Senior, QinetiQ, Meggitt, Rolls-Royce and BAE Systems were all trading in the red.Top performing sectors so far todayForestry & Paper 10,986.79 +2.41%Oil & Gas Producers 8,068.80 +1.43%Real Estate Investment & Services 2,612.31 +0.63%Mining 16,775.53 +0.62%Media 6,344.40 +0.58%Bottom performing sectors so far todayConstruction & Materials 4,332.08 -1.51%Aerospace and Defence 5,275.14 -1.14%Personal Goods 23,676.27 -1.05%Industrial Engineering 10,299.13 -0.96%Gas, Water & Multiutilities 5,623.15 -0.91%BC