Smiths Group (LSE:SMIN) shares leapt 15% higher after the engineering giant produced a stronger-than-expected start to its new financial year, having finished the last one with a whimper.
This led to the FTSE 100-listed group upping its outlook for the year and resuming and expanding its share buyback from £100 million to £150 million.
Sales in the first quarter to 1 November were up 15.8%, or 13.1% if adjusting for a higher number of trading days in the period.
Growth was well spread across its different divisions, with a "high single-digit" percentage increase at Jone Crane, "strong double-digit" growth at Smiths Detection, growth in Flex-Tek Aerospace and a strong recovery, while Smiths Interconnect was the stand-out performer as its Semiconductor-test was said to be "significantly improved".
Given the stronger-than-expected start to the year, Smiths has guided to organic sales growth of 5-7%, up from the previous outlook of 4-6%.
Operating profit margins are guided up 40-60bps, which is more precise and slightly stronger than previously suggested.
Smiths said the resumption of the buyback follows its decision not to pursue a medium-sized acquisition it was "closely evaluating" in September and October.
Chief executive Roland Carter said a strong order book drove the positive first quarter and that the group performance benefited from the performance of its US business, which represents around 45% of revenue.
Analysts at Stifel said it was "an impressive update, which should be clearly positive to a share price that has been languishing".
"We also note that Smiths looks well-placed for new geopolitical realities - low exposure to China, big dollar earner, big hydrocarbon end markets, and largely local-for-local in its markets."
Smiths shares, which had tanked from 1,820p in September on the back of disappointing final results to around two-year lows of just above 1,500p late last month, jumped to 1,754p in early trading on Wednesday.