(Recasts, adds background, share price)
LONDON, Nov 10 (Reuters) - British engineer Meggitt said weakening demand from airlines for spare parts continued to hurt its performance, as new lockdowns put paid to the improvement it expected to see in the fourth quarter.
The company, which supplies jet parts such as braking systems, sensors and fuel systems, said however its defence and energy businesses continued to grow and it was on track to make cost savings in line with its targets.
Meggitt said the pandemic would cut its profit by as much as 55% this year. It expected to make underlying operating profit of between 180 million pounds and 200 million pounds for 2020, compared to a consensus forecast of 205 million pounds.
The pandemic hammered its aerospace unit as lockdowns and travel restrictions meant airlines slashed their flying schedules, resulting in much lower demand for parts and maintenance services that Meggitt provides.
Earlier in the year, it said it would cut costs by 400 million pounds to 450 million pounds for 2020, reduce staff numbers by 1,800 and axe its dividend.
Shares in the company were flat at 374 pence at 0853 GMT. The stock had closed up 28% on Monday, boosted by positive news about a vaccine.
“While we remain alive to the challenges which COVID-19 continues to pose, we are encouraged by recent news on vaccine development and the positive implications for air travel,” Meggitt’s CEO Tony Wood said on Tuesday.
Reporting by Sarah Young, editing by Estelle Shirbon and Paul Sandle
Our Standards: The Thomson Reuters Trust Principles.