Analyst Views | How did you take Smiths Group's results?

GLEN LIDDY, JP MORGAN
The performance of [the detection] division is falling below expectations on the back of problems with three contracts entered into prior to 2010 and costs relating to provisions relating to legal disputes. We have reduced our 2013 earnings per share [forecast] to reflect the additional costs.

CHRIS DYETT, INVESTEC
Contract cost overruns are never good news – apart from the direct financial impact, they call into question a company’s systems and conservatism – but the £15m hit for Smiths Detection looks like a one-off in a business that is now on an improving trend.

SCOTT CAGEHIN, NUMIS
Smiths Group released a pre-close trading update highlighting weaker contract mix within its detection business. These issues appear to be one-off in nature, derived from contacts won prior to 2010, but we believe the shares will take a pause for breath after a recent strength.