Smiths Group warns on X-ray scanner arm profits

23rd May 2014 08:12

X-ray scanner and medical equipment maker Smiths Group unveiled weaker revenue as tough trading in its detection and medical businesses spoilt a good performance at its John Crane energy services operation.Smiths said underlying revenue in the nine months to May 3rd would be slightly lower than in the same period a year ago due to issues in detection, which makes security scanners for airports, and medical, which makes surgical devices.It said: "The full year outlook for headline operating profit is in line with expectations for all businesses except Smiths Detection, where profitability is now expected to be £25m lower due to a combination of working capital adjustments, reduced volumes and contract mix on lower margin contracts and extra costs."John Crane, which supplies seals, bearings and other mechanical products to oil and gas majors, increased revenues and is achieving record orders due to strong demand particularly from oil refining customers in the US, Middle East, Asia and Brazil, although its business serving oil producers was facing headwinds.Smiths said it still expected the annual outlook for its medical business to be below a year ago, as previously guided, although it continued to anticipate a stronger trading performance in the second half than the first.Smiths Detection faced further challenging trading conditions during the third quarter. Underlying revenue declined in the nine months primarily reflecting weaker demand from cargo screening and transportation, albeit against a strong comparator period.PW