Sweden's HMS Networks Q3 sales rise 15%, meet expectations

Overview

• Swedish industrial ICT provider's Q3 sales rose 15% yr/yr, meeting analyst expectations

• Company's Q3 order intake grew 29% yr/yr, driven by advance customer orders

• Company announced public tender offer for Spanish building automation firm Robot S.A. during the quarter

Outlook

• Company says demand remains solid across major markets year-to-date

• HMS expects gross margin pressure to persist through Q4 and possibly into 2027

• Company cites rising component costs, trade tensions and geopolitical risks as sources of uncertainty

Result Drivers

• INDUSTRIAL DEMAND - Co said improved industrial economy and investments in data centers and semiconductors supported growth

• ADVANCE ORDERS - Co said customer concerns over lead times and price hikes led to advance orders, boosting order intake

• REGIONAL GROWTH - Co said Asia and Europe saw strong order growth, with Japan and China performing well and Europe recovering

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the communications & networking peer group is "buy"

• Wall Street's median 12-month price target for HMS Networks AB is SEK615.00, about 13.7% above its October 20 closing price of SEK541.00

• The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 32 three months ago

Reuters Recommended Reads

• Oct 20 - Switzerland's ABB Q3 revenue rises 14%, to form joint venture with Mitsubishi Electric

• Oct 20 - Switzerland's Comet Holding Q3 sales jump on AI, semiconductor demand

• Oct 21 - Sweden's Kebni Q3 net sales falls

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)