Lately blowout reports have been treated with a run-up going into the report and then a pop on the news followed by a heavy profit taking sell-off that has pushed the stock below. Helped by an improving sentiment towards the end of the week on hopes of more money printing to come helped Metso Group (OMX: MEO1V) to buck that trend following Thursday afternoon release of Q2 2012 accounts. Net sales growth of 21% and profit above all estimates certainly did not hurt either. Services sales already represent almost half of the 1.9 billion of net sales. Quarterly earnings reached 0.70 Euros.
Comparison period included major orders so the order intake looks worse than it actually is. The 1.735 billion Euros worth of orders received did not include any major ones and is pretty much on par with 2010 Q2. Guidance is maintained, with net sales expected to grow from 2011 and EBITA before non-recurring items to improve.
Current demand is relatively stable but the company remains vigilant. Mining equipment, project and services demand is excellent, construction capital and services demand satisfactory as is power segment demand, automation demand is good where as pulp mill market activity is satisfactory while paper and board machines demand is weak but services activity for existing facilities is good. Metso’s share regained 30 Euro plateau on the heels of this report.
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