Meggitt left reeling by extreme environment, Investec cautious

That led the broker to place its recommendation and target price for the shares of the global engineering group 'under review'.

The firm, which describes itself as a specialist in extreme environment components and sub-systems for aerospace, defence and energy markets.

As regards energy, the 16% drop in the unit´s revenues suggests "weakness is no longer limited to to Heatric, but has spread to other businesses", analyst Rami Meyrson said.

The business-mix worsened across all of the firm´s end markets, shifting towards higher original equipment and lower after market sales, including in the civil and military aftermarkets.

Within the latter, a number of programme deferrals also impacted margins.

"Q3 weakness has continued into Q4 across the markets. We believe “meaningful” implies an approximately 10% cut to fiscal year 2015 consensus earnings per share [estimates] and we expect a larger cut to fiscalyear 2016," Meyrson said.

Lower 2015 operating earnings (EBITDA) means the company will overshoot its year-end target for net debt to EBITDA of 2.1, the analyst added.

"Today’s warning raises questions on the timing of recent acquisitions and the cessation of the share buyback given weakness in the core businesses."