(Reuters) – Elevator and escalator maker Schindler exceeded forecasts on Wednesday, lifting its shares with improved fourth-quarter earnings, helped by easing supply chain bottlenecks.
The Swiss group’s shares were up 4.2% at 0845 GMT after it said adjusted earnings before interest and taxes (EBIT) were up 1% to 309 million Swiss francs ($334 million), ahead of a 279 million franc estimate from a company-provided consensus.
“The improvements over the last two quarters indicate that our recovery is in motion,” Chief Executive Silvio Napoli said.
Schindler’s EBIT margin reached 10.2% in the October-December period, above the 9.5% expected by analysts.
“The main highlight … is the 11% beat to Adj EBIT on the back of progress in resolving legacy issues and easing supply chain constraints,” Jefferies analyst Rizk Maidi said in a note.
In an earnings presentation, Schindler said it was making progress on resolving supply chain disruptions while adjusting for a Chinese market contraction, with new installation markets, including China, expected to decline further.
Economic growth in China in 2022 slumped to one of its weakest rates in nearly half a century, hit by a property market slump and by pandemic controls and COVID-19 outbreaks that especially affected the second and the fourth quarters.
China makes up around 17% of Schindler’s sales and the country’s real estate sector, which is responsible for broadly one-third of its gross domestic product (GDP), was one of the biggest drags on its economy last year.
Schindler said its fourth-quarter net profit was 178 million Swiss francs, beating analysts’ estimates of 170 million francs. It said it expects low single-digit revenue growth in local currencies for 2023, citing an ongoing global economic slowdown and the pressure on the real estate and construction sectors.
The company also said it would propose an unchanged dividend of 4.00 Swiss francs per share.
($1 = 0.9269 Swiss francs)
(Reporting by Bartosz Dabrowski and Philipp Krach in Gdansk; Editing by Christian Schmollinger, Uttaresh.V and Alexander Smith)
