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Sweden's NOTE Q3 sales rise 27%, but miss estimates

By Reuters News


Overview

  • Sweden electronics manufacturer’s Q3 sales rose 27% yr/yr but missed analyst expectations

  • Q3 EPS rose to SEK 1.98 from SEK 1.92

  • Company says material shortages and plant relocations limited growth and profitability


Outlook

  • Company says order backlog for current year is 12% higher than previous year

  • Company says order book for H1 2027 is about 20% higher year-on-year, including acquisitions

  • AI data-centre customer production is scheduled to start in Q1 2027, with potential annualised sales of about SEK 100 mln in 2028


Result Drivers

  • ACQUISITION-LED DEFENCE GROWTH – Recent acquisitions contributed to Security & Defence sales growth of 222% in Q3; organic growth was 19%

  • PLANT RELOCATIONS - Production disruptions linked to plant relocations for two operations limited growth and profitability, per CEO

  • UK AND CHINA DRAG – Slower progress at China and previously started UK plants reduced local profitability and consolidated profit


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Sales

Miss

SEK 1.06 bln

SEK 1.11 bln (3 Analysts)

Q3 EPS

SEK 1.98

Q3 Net Income

SEK 57 mln

Q3 Operating Margin

8.60%

Q3 Operating Profit

SEK 91 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the semiconductors peer group is "buy"

  • Wall Street's median 12-month price target for Note AB (publ) is SEK195.00, about 12.6% above its October 22 closing price of SEK173.20

  • The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 13 three months ago


Reuters Recommended Reads

  • Oct 22 - Nordic Semiconductor Q3 revenue beats estimates

  • Oct 21 - Sweden's HMS Networks Q3 sales rise 15%, meet expectations

  • Oct 22 - London Stock Exchange Group Q3 total income up 8.8%


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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