Sector movers: Rolls-Royce profit warning hits defence stocks

13th Feb 2014 16:27

Aerospace and defence stocks were hammered on Thursday by a profit warning from sector heavyweight Rolls-Royce, after the company said that cuts in government defence spending would keep a lid on profits this year.The world's second-largest maker of aircraft engines revealed an estimated 15-20% drop in defence revenue would hinder results in 2014 as it reported its annual earnings for last year.Analysts at Investec said that they would reduce their profit before tax forecast for this year by 11% after the "bearish" guidance."The longer term story remains good but the statement and guidance today is a major disappointment and will set back the share price for some time, in our view," said Analyst Chris Dyett.The stock was 13.6% lower at 1,045p by the close of trade on Thursday, having fallen as much as 18% earlier on.London-listed defence peers BAE Systems and Meggitt were also trading firmly lower after the statement. Cobham QinetiQ and Senior were similarly under the weather.Top performing sectors so far todayTobacco 34,838.77 +2.68%Technology Hardware & Equipment 1,133.32 +0.58%Electricity 9,192.58 +0.52%Health Care Equipment & Services 5,214.55 +0.33%General Industrials 4,458.21 +0.23%Bottom performing sectors so far todayAerospace and Defence 4,892.29 -8.01%Industrial Metals & Mining 1,108.26 -2.14%Software & Computer Services 1,150.77 -1.54%Food Producers & Processors 7,130.07 -1.43%Insurance (non-life) 1,837.73 -1.30%BC