Elevator maker Kone Q3 misses on earnings as China, supply disruptions weigh
FILE PHOTO: Logo is displayed in an elevator at the KONE Academy of Finish elevators and escalators manufacturer KONE in Hanover, Germany, February 6, 2020. Picture taken February 6, 2020. REUTERS/Fabian Bimmer
HELSINKI : Elevator maker Kone posted weaker-than-expected third quarter core earnings as uncertainty in the Chinese property sector, supply chain problems and rising material costs hurt profitability, driving its shares down more than 5per cent.
"Activity in the Chinese property sector showed signs of tempering, as uncertainty around liquidity constraints increased in the quarter," Chief Executive Henrik Ehrnrooth said in a statement.
Kone expects logistics and component costs to rise towards the end of the year.
The Finnish company trimmed its estimate range for annual profits and now expects its 2021 adjusted operating income margin to be 12.4-12.8per cent from 12.4-13per cent.
Kone's shares were last down 5.3per cent at 55.68 euros.
Investors have been on the lookout for any signs of fallout from China's property development sector after the world's most indebted developer China Evergrande Group's difficulties to repay debts spread to other companies there.
Kone's order intake, an indication of future revenue, grew 14.5per cent year-on-year to 2.21 billion euros and quarterly sales remained stable at 2.6 billion, missing the 2.7 billion euro consensus estimate.
July-September operating profit fell to 326.5 million euros (US$378.22 million) from 333 million a year earlier, missing the 348 million estimate of 13 analysts polled by Refinitiv.
(US$1 = 0.8633 euros)
(Reporting by Essi Lehto; editing by Jason Neely)
