Cobham sees full year earnings at lower end of market range

Engineering firm Cobham expects underlying earnings per share for the full year to be at the lower end of current market expectations on the back of order delays and decreased demand for some of its products.

The current market consensus is 20.1p to 21.7p and Cobham said that even at the lower end, group underlying EPS growth would come in at around 9%.

The company has seen continued good progress on its its aerial refuelling programmes, with the first flight of the Boeing KC-46 aerial refuelling tanker occurring at the end of September.

In addition, Cobham pointed to solid good progress with the Aeroflex integration, generating efficiencies from site integrations and from direct and indirect supply chain savings, and said it remains on track to achieve the synergy benefits identified at the time of the acquisition.

However, the company also highlighted some market headwinds, largely impacting its shorter cycle businesses and, in particular, SATCOM.

It said these have been driven primarily by underlying demand conditions in Asia-Pacific and continued weakness in oil and gas related markets. Cobham also suffered from delays in receiving some anticipated orders in the US surveillance business.

Cobham added that it expects net debt at the end of 2015 to be lower than at the prior year end thanks to proceeds of the divestments completed in the year.

At 0830 GMT, Cobham shares were down 2.3% at 278.90p.