By Pierre Bertrand
Shares of Geberit slipped Thursday after the Swiss bathroom-systems products maker reported lower second-quarter earnings that also missed expectations.
At 0956 GMT, shares traded 4.4% lower to CHF447 after initially trading 5.4% lower earlier in the session.
The company said that its result was affected by significantly lower volumes compared with the prior year, and by the decline in Europe’s construction industry.
The company also said it saw considerable wage inflation. It added that it expects a mid-single-digit decline to sales in 2023 and an earnings before interest, taxes, depreciation and amortization margin of around 29%.
Stifel analyst Christian Arnold said in a research note that though Geberit is managing the downturn of its end markets well, the company significantly missed organic growth expectations and its guidance should trigger downward revisions to consensus estimates.
The guided sales decline is below the 1.5% decline that consensus was anticipating, Jefferies analysts say in a research note, adding that they believe the guidance implies flattish on-year organic sales growth in the second half.
Baader Helvea analyst Emrah Basic said in a note that Geberit’s sales guidance implies around 4% to 5% declines to estimates.
Geberit reported 153.5 million Swiss francs ($174.4 million) in second-quarter net profit, compared with CHF182 million a year ago, on sales that declined 19% to CHF769.1 million.
Write to Pierre Bertrand at [email protected]
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