Hexagon AB shares jump on positive quarterly results, confidence over China
Industrial technology group Hexagon reported earnings this week that met analysts’ expectations. The company was able to post year-on-year sales increases for every market in which they operate, and gave investors a positive talking point by professing confidence in China and the global economy. The combination of a demonstrably strong business and a positive outlook was all it took to propel Hexagon’s share price up.
Investors liked what they saw, sending the company’s share price up by 13% so far this year
Source: Yahoo Finance
Hexagon said that operating net sales rose by 9% in the fourth quarter of 2018, year on year. Applying fixed exchange rates and “a comparable group structure” (i.e.: organic growth) that becomes 5%. Operating earnings rose by 10% against the year-ago quarter, and operating cash flow increased by 46% over the same period.
In the run up to reporting earnings, investors had voiced a number of concerns about Hexagon’s quarter. For one thing, the company is heavily exposed to China, which accounts for a sixth of its sales. The company, however, expressed confidence in the Chinese market, noting that it delivered 5% of year on year organic growth last quarter. Likewise, investors feared that slumping car sales and a slowdown in the electronics industry would also act as painful headwinds throughout the quarter. Thankfully, that did not turn out to be the case, and Hexagon’s underlying business looks as solid as ever.
In a brief statement, the company’s CEO, Ola Rollen, said: “despite the uncertainties surrounding the world economy, we are confident in our ability to continue to grow and strengthen our profitability.” That, it appears, is all that investors needed to hear.
Dominion holds Hexagon in its Global Trends Managed Fund.
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