Shares in engineering solutions specialist Senior (LSE: SNR) have slumped by 13% today after it released a rather mixed pre-close trading update. While its Aerospace segment is trading in line with expectations, the company’s Flexonics division continues to experience challenging trading conditions. As such, it’s focusing on cost management and efficiency initiatives, although market conditions in the truck and off-highway and oil and gas markets are expected to remain tough.

As a result of the difficult outlook for Flexonics, first-half margins are likely to be lower than expected and are due to be in the range of 8% to 9%. Clearly, this is disappointing and is a key reason why investor sentiment has taken a hit today.

With Senior forecast to report a fall in earnings of 8% this year, it wouldn’t be surprising if its shares continue to come under pressure in the short run. However, with a focus on cost management, its outlook for next year is much more positive and it’s expected to record a rise in its bottom line of 8%. Trading on a price-to-earnings growth (PEG) ratio of 1.6 indicates that for long-term investors, Senior could be a sound buy although it’s likely to be volatile over the short-to-medium term.

Investing for growth

Also reporting today was Saga (LSE: SAGA), with the over-50s product specialist releasing an encouraging update. It has experienced solid trading across the core insurance and travel businesses, with it investing for future growth through development opportunities across the emerging world.

Furthermore, it remains on track to meet full-year expectations and with it expected to increase its bottom line by 4% in the current year and by 10% next year, it seems to be performing well as a business. This strong growth rate puts Saga on a PEG ratio of only 1.3, which indicates that there’s significant upside potential following its 6% share price fall in the last year. And with it having a yield of 4%, it remains a sound income play for the long term too.

Shares plunge

Meanwhile, shares in Chemring (LSE: CHG) have fallen by 22% today after the defence specialist announced a widening of losses in the first half of the year. Underlying pre-tax losses increased from £1.3m in the first half of last year to £4m in the first half of the current year. The reasons for this are the slightly later than expected commencement of a 40mm ammunition contract together with a lower margin sales mix, the phasing of revenue within the current year and contract-specific issues resolved in the period.

Looking ahead, Chemring expects its full-year result to now undercut previous expectations. Despite its sales rising by 11.4% and the business being in a stronger financial position following its recent fundraising, it would be of little surprise for the shares to come under further pressure in the short run. Therefore, it may be prudent to await further evidence of a turnaround before buying a slice of Chemring.

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Peter Stephens owns shares of Saga. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.