Johnson Matthey drops as metal prices hit Q1

City A.M. Reporter
Shares in Johnson Matthey shed 4 per cent, the second biggest FTSE 100 faller, after the British speciality chemicals company posted a virtually flat first quarter on the back of weak precious metals prices, prompting worries it could miss market forecasts for the first half.

Johnson Matthey, the world's largest supplier of catalytic converters, posted a profit for the three months that was up less than 2 per cent on the year earlier, as the impact of lower platinum and palladium prices offset the benefit of increased car and truck sales in North America. It said the second quarter would be in similar to the first.

Analysts say this indicates the company’s results would come slightly below the market's expectations for the first half. The consensus forecast for full-year underlying pretax profit is around £432m, with the first-half consensus at around £217m, according to Thomson Reuters forecasts.

"They came in at £99.9m for the quarter and guided it would be the same for the second quarter," said one industry analyst who declined to be named. "That would indicate a miss for the first half, which explains the (extent of) the share drop."