Andritz AG (ANDR), the second-biggest maker of hydropower turbines, lost a fifth of its value after cost overruns at a Brazilian pulp mill caused a profit warning.
Andritz fell as much as 24 percent, the most ever, and was down 18 percent, or 9.11 euros, at 40.37 euros by 10:02 a.m. in the Austrian capital. More than eight times as many shares changed hands than the average trading volume over the last 90 days. The Graz, Austria-based company’s market value fell by almost 1 billion euros ($1.32 billion) to 4.2 billion euros.
Cost overruns at a Brazilian pulp mill being built by Andritz caused the company to report “significantly” lower profit than expected. First quarter net income fell by 92 percent to 4.1 million euros, the company reported after markets closed on April 30. Order intake dropped 5.4 percent to 1.29 billion euros.
“This could raise concerns over Andritz’s capacity to win new large-scale order awards given the potential reputational damage and its more conservative bidding approach going forward,” wrote Citigroup analyst Alex Atienza, who is “neutral” on Andritz shares, in a research note.
Goldman Sachs maintained its “conviction buy” recommendation on Andritz shares while lowering its six-month price target to 66 euros, the bank wrote today in a research note. “Andritz is strongly positioned to benefit from long-term growth trends,” Goldman said.
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