Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Smith & Nephew profit margins, revenue forecasts trimmed
Smith & Nephew LON:SN. have a Q3 trading statement out today, highlighting revenue growth of 4% with China continuing to drag on the business performance as a result of worse than expected headwinds across the surgical business in the country. As a result, full year underlying revenue growth has been revised down to 4.5% from the previously stated range of 5%-6%. Profit margin forecasts are also being curtailed significantly, although this is expected to be transient with a dramatic improvement being eyed for FY25.
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#2. Shell profits beat expectations after higher gas sales
Q3 numbers are also out from energy giant Shell LON:SHEL this morning with the company posting better than expected profits of $6bn as a result of higher than forecast gas sales offsetting falling crude prices. A new share buy-back scheme has been launched for an additional $3.5bn to be completed over the coming three months – the 12th consecutive quarter that has seen a capital return using this mechanism on this scale – whilst a 34c per share dividend is also payable.
#3. Headwinds set to drag into New Year at Spectris
The precision engineering firm Spectris LON:SXS issued a Q3 update this morning, noting that the anticipated recovery in demand is taking longer to materialise than had been previously forecast. Order weakness in key areas is continuing to weigh and management now expect this to carry into the new year. Costs are being managed in a bid to drive profitability but foreign currency headwinds and the impact of divestments are both dragging on performance, too.
