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Investing.com -- Smiths Group (OTC:SMGZY) on Tuesday said that it expects full-year organic revenue growth to be at the upper end of its 6–8% guidance range, supported by strong Q3 performance. Organic revenue grew 10.6% in the quarter, bringing year-to-date growth to 9.6%.
The company also maintained expectations for full-year margin expansion of 40–60 basis points.
Jefferies described the update as a “very healthy” performance, emphasizing the robust organic constant currency (OCC) growth.
All business segments saw growth in Q3, with Smiths Detection and Smiths Interconnect standing out as the key drivers.
Detection delivered strong double-digit growth, driven by aviation sector demand for next-generation technology, while Interconnect achieved low double-digit growth, supported by semiconductor market recovery and aerospace & defense wins.
John Crane reported marginal growth, impacted by a January cyber incident and tough year-on-year comparisons.
However, second-half growth is expected to match the first half, backed by a solid order book, particularly in original equipment manufacturing.
Flex-Tek posted improved growth versus the first half, driven by strong aerospace demand and U.S. non-residential construction.
Jefferies noted high single-digit OCC growth but highlighted the need to improve operational gearing despite solid revenue performance.
About 45% of Smiths Group’s sales are generated in the U.S. The company anticipates minimal direct impact from tariffs, citing its “local-for-local” model and mitigation strategies such as exemptions, pricing actions, and alternative sourcing.
Jefferies called the company’s response “robust,” though indirect macroeconomic impacts remain uncertain and are factored into FY25 guidance.
Strategically, Smiths Group is progressing with its plan to focus on John Crane and Flex-Tek while developing FutureSmiths.
The separation of Smiths Interconnect and Detection is underway, with the sale of Interconnect expected by the end of calendar 2025.