Finnish mining equipment maker Metso Outotec on Tuesday reported strong growth in orders but its quarterly core earnings missed forecasts as sales were hurt by logistic bottlenecks and a component shortage.
Metso said it expected strong demand to continue, lifting its shares 4.7% to more than 9 euros.
Its July-September order intake doubled to 1.65 billion euros ($1.91 billion) from last year, above the 1.52 billion analysts had expected, sales grew 7% to 1.02 billion euros, missing analysts’ 1.11 billion forecast.
In August Metso had indicated its sales would grow when it posted a 43% jump in second-quarter order intake.
“Sales grew slower than orders, due to our backlog consisting of more longer lead-time equipment orders and supply chain and logistics constraints,” Chief Executive Pekka Vauramo said in a statement.
The backlog grew by 22% from the second quarter to 3.5 billion euros.
Metso’s comparable earnings before interest, taxes and amortisation rose to 139 million euros from 111 million last year, missing the 151.1 million mean estimate in a company provided poll.
“Compared to the revenue, profitability was at a very good level,” Inderes analyst Erkki Vesola told Reuters, attributing that to merger synergies and improved product margins.
Two years ago Metso split its operations into two, merging its minerals business with mining technology company Outotec and renaming it’s valve business Neles which is set to be taken over by Valmet in January.
Vauramo said he expects the merger to be concluded by the end of the year.
Metso also updated its carbon emissions target, saying it now aims to reach net-zero by 2030 instead of a 50% reduction.
Net-zero can be reached by reducing greenhouse gas emissions or balancing out carbon emissions by removing the same amount from the atmosphere.
($1 = 0.8627 euros)
(By Essi Lehto; Editing by Kirsten Donovan and Emelia Sithole-Matarise)
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