COB Q3 results show significant challenges in its two key sectors
Companies: Cobham
Cobham Plc (LSE: COB) released a Q3 trading update this morning, confirming that the period had been challenging for the group and, as a result, performance was behind management's expectations.
COB said weaker performance had been driven by underperformance in the Integrated Electronic Solutions business unit and in the SATCOM and Wireless business units:
"Demand conditions in maritime SATCOM have continued to be subdued, offset in part by limited growth in revenue from next generation Ka band products. In addition, while good progress is being made in Wireless by the new management team, this has been at a slower pace than expected, with some revenue deferral and additional costs incurred from increased resource requirements."
The company said it expected an improvement in trading in Q4, but confirmed that despite this, the Group's anticipated full year results are likely to be below the Board's previous expectations:
"...some quarter on quarter volume growth is anticipated in SATCOM. Wireless is expected to execute against an encouraging order pipeline, notably for in-building wireless products, although its overall performance in 2016 will remain significantly lower than previously anticipated."
The Board says it anticipates trading profit for 2016, including favourable currency impacts, will be between £255m to £275m, whilst net debt/EBITDA gearing ratio will be around 2.6x.
The company's share price opened down 13.4% this morning, and is down more than 50% for the year following multiple profit warnings.
