22.10.2010

Nordic markets ended the day down a hair as we go into a weekend during which a G20 meeting that is expected to feature currency war topics will be held. German consumer confidence is at its highest in three years. Lundin Mining was up over 11% with analysts’ upgrades working as a catalyst.

Ericsson’s results were affected by component shortages, telecom operators which are still cautious with their investments in many countries and the strong Swedish krona also had a negative effect. Despite all of these issues, the company reported a 3,68 billion SEK profit and the shares of the world’s largest maker of wireless networks gained 4% for the day. The mobile phone joint venture Sony Ericsson contributed positively into the result.

Atlas Copco’s record profit and strong order growth did not satisfy markets.The company’s stock price quickly went down nearly 5% on the news and ended down nearly 3%. The industrial tooling and equipment manufacturer expects sequential improvement driven mainly by emerging markets.
Volvo’s result rose to 4,2 Billion SEK for the third quarter. Analysts were expecting about a fifth less. The CEO Leif Johansson brought up the improved order intake as the main issue stemming from this quarter. Husqvarna reported good levels of activity but felt the wrath of a strong krona as well. Profit was pretty much matching expectations at 310 million SEK.
Alfa Laval AB, a Swedish manufacturer of products and solutions used to transfer heat, separate and transport various products reported a result of 1,044 billion SEK after financial items. The company CEO Lars Renström said that the company expects demand during Q4 to be at about the same level as in Q3. This was not enough to satisfy traders and the stock lost some 5%.
Medical device company Q-Med AB missed market expectations by a country mile. Earnings per share amount to 1.76 SEK. The Q3 report highlighted that Q-Med’s partner Medicis has been sued by Genzyme for alleged patent infringement. Q-Med’s stock was hit hard and ended the day down more than 15%.

Tilgin AB, which has been a star performer as of late due to major orders, reported a negative result of -5.8 million SEK. The company also said it will seek to moved into First North (The local Pink Sheets, albeit with a tad more stringent regulations for entering, which was previously called something like ”New Market”) from the main Stockholm Exchange. Around half of the recent gains were wiped out as a result.

Scanfil now expects that contract manufacturing sales will grow clearly from 2009 levels due to expected strong demand toward the rest of the year, whereas earlier the company was expecting a small rise. The operating profit for Q3 was 11,2 million Euro.

The proposed 0.5 Euro extraordinary dividend that Elisa announced in connection with its Q3 result prompted newspaper Talouselämä to say that Elisa has evolved into a dividend machine. The newspaper noted that during the last six years, Elisa has a dividend payout ratio of nearly 120%. The actual result was pretty much like last year, which was not enough for the markets.

Talouselämä received publicity also via the notice of Ahlström that the company is starting an internal inquiry into one of its representative’s business practises in India. Talouselämä had earlier reported about Ahlström’s factory project in India and speculated that the company may need to use consultants for certain necessary costs. Somehow we in the Nordic countries tend to sit on a high horse when such issues are raised, claim that “our companies” are able to use high ethical standards in our dealings with stakeholders worldwide and yet we have perfected a system of legalized corruption ourselves.

Like rival Outokumpu the day before, Rautaruukki also blamed seasonal factors but said it is starting to see significant improvement toward the end of Q3. Exchange rate losses weighed in on the result and due to non-recurring items and unrealized USD derivates losses the company expects before tax result to be negative and operating profit to be positive. Rautaruukki is only just discovering the allure of emerging markets and many feel it is late for the party.

Outotec improved its result due to successful project deliveries and the growth in the service providing. Net cash flow was strong even if operating profit was not quite up to the rosiest of predictions.

I mentioned on October 8th about a tender Konecranes had sent to Demag Cranes Ag. Today there was further speculation of impending takeover of the firm in Germany. Konecranes’ CEO Pekka Lundmark as interviewed by Financial Times Deutschland and said the company has a clear interest to start negotiations with Demag’s leadership, but that Konecranes is not planning to make a hostile offer at least for now.

Steel and metal wholesaler BE Group’s result for Q3 was 35 million NOK, almost matching expectations. Shares of Danish aircrete producer H+H international were suspended early on Friday pending an announcement from the company. The announcement turned out to be a non-binding offer to buy out the whole company. The share price quickly gained 50% and ended the day up nearly that much.