(Reuters) -Engineering firm Smiths Group reported annual headline operating profit above market estimates on Tuesday, helped by strong demand for its upgraded baggage-screening kits and explosives
Smiths Group Reports Strong Profit Growth, Shares Hit Record High
Smiths Group Financial Performance Overview
By DhanushVignesh Babu
Profit and Revenue Highlights
(Reuters) -Engineering firm Smiths Group reported profit and revenue above market estimates on Tuesday, helped by strong demand for upgraded baggage-screening detectors and a recovery in the semiconductor market, sending shares to an all-time high.
Challenges Faced by John Crane
The conglomerate is shifting its focus towards industrial engineering after facing investor pressure, a plan includes selling its Smiths Interconnect arm and spinning off its Smiths Detection business.
Future Growth Projections
The group said the divestment plans were progressing well and that it expected to update the market on Interconnect by the end of 2025.
Smiths Interconnect provides electronic components, while Smiths Detection is known for its baggage-screening kits in airports and its explosives detectors.
The British company forecast an organic revenue growth from continuing operations of 4%-6% for the year ending July 2026, compared with 5.3% expected by analysts in a company-compiled poll. It reported growth of 7.2% for the 2025 fiscal year.
"We have absorbed some minor headwinds in tariffs, and our fiscal year 2026 guidance includes our understanding of tariffs as they stand at the moment. So we feel that we are robust and resilient in this current macroeconomic situation," CEO Roland Carter said in an interview with Reuters.
Shares in the company rose as much as 7% to a record high of 25.5 pounds.
However, John Crane, Smiths Group's largest revenue contributor, has faced challenges due to a slowdown in the U.S. construction market. John Crane offers mechanical seals and engineered solutions for industrial markets, including in the oil and gas sector.
"The John Crane organic growth miss may worry some investors, but we note that this has been driven by ongoing operational challenges that were exacerbated by the cyber incident, and not end market demand," analysts at JP Morgan said in a note.
Smiths Group reported a cybersecurity incident in January that it said involved unauthorised access to its systems.
The company reported headline operating profit of 580 million pounds ($783.17 million) for the year ended July 31, above analysts' estimates of 573 million pounds.
(Reporting by Raechel Thankam Job and DhanushVignesh Babu in Bengaluru; Editing by Subhranshu Sahu, Aidan Lewis)
