FLSmidth Declines on Profit Forecast Concerns: Copenhagen Mover
FLSmidth & Co. A/S (FLS) fell the most in eight weeks in Copenhagen trading on speculation the Danish mining equipment maker will follow two Finnish competitors in cutting its profit forecast.
FLSmidth dropped as much as 5 percent, the most since Aug. 20. The stock, today’s biggest loser in the Nasdaq OMX Copenhagen 20 Index (KFX), declined 3.8 percent to 278 kroner at 11:32 a.m. in the Danish capital. Trading volume was 92 percent of the three-month daily average.
Outotec Oyj today lowered its 2013 profit and sales forecasts and said it will cut 500 jobs as mining customers reduce capital spending. Metso Oyj said mining and construction equipment sales will be “somewhat” below last year’s level. The reduced forecasts are “bad news” for equity investors in Copenhagen-based FLSmidth, Nordea Private Banking said.
“There’s a definite risk that FLSmidth will also be forced to give a profit warning,” the bank, a unit of Stockholm-based Nordea Bank AB, said in a note to clients.
FLSmidth most recently cut its sales and profitability forecasts on Aug. 23. The Danish company, which has missed analyst net-income estimates in its last six quarterly reports, is scheduled to publish third-quarter earnings on Nov. 6.
FLSmidth shares are more expensive than those of its two Finnish peers, when measured against analyst earnings estimates for the coming 12 months, according to data compiled by Bloomberg. FLSmidth’s current forward 12-month price per earnings ratio is 18.4, according to the data. That compares with ratios by the same measure of 11 (OTE1V) for Espoo-based Outotec and 11.4 (MEO1V) for Helsinki-based Metso.
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