Securitas AB, the second-biggest guarding-services provider, said second-quarter profit fell 22 percent as the company raised pay and lost some large contracts in Europe. The stock dropped as much as 14 percent.
Net income declined to 368 million kronor ($56 million) from 471 million kronor a year earlier, Stockholm-based Securitas said today in a statement. That compared with the average estimate of 419 million kronor in a Bloomberg survey of 11 analysts.
“In Security Services Europe, the loss of a few major contracts and difficulties to manage the balance between wage increases and price increases have resulted in a non-satisfactory development,” and the company is working to restore its performance, Securitas said in the statement.
Securitas offered on May 16 to buy Niscayah AB through a share swap that values the company at 5.1 billion kronor based on yesterday’s closing share price. Stanley Black & Decker Inc., most known for its power tools, outbid Securitas on June 27, offering 7.6 billion kronor to expand the U.S. company’s security-related business.
Securitas fell as much as 8.37 kronor to 49.98 kronor and was down 13 percent as of 9:04 a.m. in Stockholm trading.
The company, smaller only than Anglo-Danish rival G4S Plc in guarding services, yesterday extended the acceptance period of its Niscayah bid until Sept. 9 from Aug. 12. Securitas spun off three of its divisions between 2006 and 2008, including Niscayah. The unit, then called Securitas Systems, was distributed to shareholders in 2006.