Weir Group once again ratcheted up profit expectations in its latest trading update. Investors had been fretting about the Scottish pump maker’s margins, which were assumed to be vulnerable after hitting a record 19.5 per cent in the first half.
Yet lucrative after-market sales were again stronger than expected in the third quarter, so that crucial profit margin should be maintained. And order input has showed no signs of slowing with an "exceptional" third-quarter spike at the upstream oil and gas business, SPM.
Weir has become the posterboy of the UK engineering sector after its promotion to the FTSE 100 in September. Peers like Spirax-Sarco and Rotork should post similarly upbeat updates this month. But after a year of extraordinary stock market gains, that's no longer a guarantee of easy returns: Weir's shares actually fell 1 per cent on the day of the announcement as skittish investors took profit.
