Sector movers: Gloomy guidance from BAE hits aerospace/defence stocks

20th Feb 2014 15:13

Gloomy guidance from heavyweight blue chip BAE Systems dragged the aerospace and defence sector into the red on Thursday.The share price of military hardware manufacturer BAE Systems dropped sharply today after it warned that profits in 2014 could fall by up to 10% on the back of pressures on US government spending.BAE said once it factored in the one-off benefit of a pricing settlement with Saudi Arabia on a Typhoon fighter jet deal combined with "continuing US budget pressures" earnings per share would fall by 5-10% next year, below the current consensus forecast.The stock was down 8.6% at 399.4p in afternoon trade.Sector peers Cobham, Ultra Electronics, Chemring and Meggitt were also trading lower today.The news came as a further disappointment to investors in the sector with sentiment already fragile in the aftermath of Rolls-Royce's profit warning last week. Last Thursday, the world's second-largest maker of aircraft engines said that an estimated 15-20% drop in defence revenue would hinder results in 2014.Top performing sectors so far todayMobile Telecommunications 5,293.67 +1.92%Oil Equipment, Services & Distribution 23,602.58 +1.29%Software & Computer Services 1,193.47 +0.65%Gas, Water & Multiutilities 5,795.82 +0.61%Electricity 9,437.05 +0.53%Bottom performing sectors so far todayAerospace and Defence 4,722.51 -2.66%Mining 17,662.64 -1.95%Automobiles & Parts 9,487.87 -1.91%General Industrials 4,465.38 -1.87%Forestry & Paper 11,180.67 -1.33%BC