NCC Falls Most in Six Months on Lower-Than-Expected Earnings
NCC fell as much as 10.25 kronor, or 8 percent, to 117.50 kronor, and was trading at that price as of 11:30 a.m. in Stockholm. It was the sharpest decline since Oct. 30. Net income was 93 million kronor ($16 million), compared with an average estimate of 106 million kronor from analysts surveyed by Bloomberg.
Nordic housing markets have declined as economic growth slows. Revenue in Sweden fell on rising borrowing costs and lower prices, and sales were ``virtually nonexistent'' in Denmark, the Baltic countries and Norway, the company said. Larger rival Skanska AB and Swedish homebuilder JM AB also fell this month after they sold fewer houses in the region.
``It was a sharp reaction on well-known news,'' said Bengt Claesson, a Stockholm-based analyst at SEB Enskilda with a ``hold'' rating on NCC. ``NCC's underlying construction business wasn't very healthy and Skanska and JM already had their stocks hammered.''
Last year, the company had a loss of 66 million kronor as it booked charges from an unprofitable project in its Norwegian division.
Sales slipped 3.5 percent to 11.41 billion kronor, compared with 11.65 billion kronor predicted by analysts. Earnings were lower in Sweden, where the company sold less than half as many housing units as last year, while both sales and earnings improved in Finland. Property development sales were lower, which Claesson said was expected ``as it's the most volatile part of the business.''
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