Chemring, the developer of missile- avoidance equipment for the Joint Strike Fighter, fell the most in more than nine years after saying full-year earnings fell short of analysts’s estimates.
Chemring dropped as much as 18 percent to 395 pence in London trading, its biggest intraday drop since October 2002. Revenue was 745 million pounds ($1.18 billion), 5 percent below board expectations, leaving operating profit below analysts’ estimates. Analysts predict earnings of 155 million pounds, up from 137.6 million pounds, according to Bloomberg data.
European government austerity programs are generating “short-term uncertainty” in defence budgets and the U.S. budget cap on defence spending is “likely to result in the delay in the placement of orders,” Chemring said. Unexpected delays in customer approval for products resulted in 37 million pounds of revenue slipping to November from October, the company said.
“The board’s expectations for the 2012 financial year remain unchanged,” Fareham, England-based Chemring said in a statement today.
Chemring was at 402 pence as of 8:37 a.m., 17 percent lower.
The full-year order book was 878 million pounds, 12 percent lower than the third quarter level.
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