Engineering group Metso (OMX: MEO1V) which provides equipment and services to pulp & paper, energy, and mining sector companies in particular reported quarterly earnings today. Net sales grew by 22% vs. Q1 2011 to 1.85 billion Euros. EBITA grew in low double digits to 140 million and earnings per share were up slightly at 0.56 EUR. Order intake of 1.9 billion can certainly be characterized as strong.
The company expects demand to continue strong in most business areas although with significant variations in between different geographies. Pulp & Paper sector activity is expected to slow somewhat. Services demand overall is supposed to be strong.
It is difficult to find one underlying reason behind today’s stock price action, Metso did after all retreat almost 5%. It would seem that even though the numbers appear to be slightly better than consensus, individual investors focusing on the individual negative comments. The margin development is perhaps the biggest of those and it has appeared in many of these early engineering sector reports. This has inspired some people to call a top.
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