The Motley Fool

Smiths Group plc Falls On 10% Profit Decline

Pound CoinsShares of Smiths Group (LSE: SMIN) fell by 1% in early trade after the engineering company announced a fall in both revenue and headline operating profit. Revenue declines in the Smiths Medical and Smiths Detection offset gains from elsewhere in the business — including at John Crane, the firm’s largest division, which provides products and services to the oil and gas sector.

Total revenues fell to £2.95bn from £3.1bn a year ago as market conditions in the healthcare and defence/security sectors — bitten by government funding constraints — continue to prove challenging.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Another significant headwind faced by Smiths Group has been the impact of currency translation and transactions, which totalled £43m, or almost 8% of headline operating profit. Operating profit fell to £504m from £560m in 2014.

In order to reposition the group to drive revenue growth, Smiths Group said it is increasing investment in product innovation, as well as expanding in higher growth markets such as India and Brazil.

“We remain well placed to benefit from growth in energy demand, the need for new fuel-efficient aircraft, increased US residential construction and investment in wireless networks,” the chief executive, Philip Bowman, said.

“However, we remain cautious about sectors such as healthcare, homeland security and defence, which are subject to government funding constraints, although there are signs that the defence market is beginning to stabilise.”

The full-year dividend increased by 2% to 40p and the board has a medium term objective to maintain dividend cover of around 2.5 times.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Mark Stones has no position in any shares mentioned. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.