Assa Abloy Gains After Earnings Beat Estimates on AmericasJanina Pfalzer
Assa Abloy AB, the world’s largest lock-maker, gained the most in six months in Stockholm after posting second-quarter profit that beat analysts’ estimates on strong growth in the Americas and smart-card security.
Net income rose to 1.37 billion kronor ($209 million) from 1.30 billion kronor, Stockholm-based Assa Abloy said today in a statement. Analysts on average expected profit of 1.34 billion kronor, according to estimates collated by Bloomberg. Sales rose 1.6 percent to 12.2 billion kronor, compared with the 12.1 billion kronor average estimate from the survey.
Assa Abloy, which sells mechanical and digital locks as well as security doors, has countered weakened European demand by expanding in emerging markets. The company is targeting 50 percent of sales from developing nations by 2025, up from about one-quarter currently. The company is currently working on “several” potential acquisitions, it said.
“My assessment is that the outlook is unchanged, with a continuing weak world economy affected by the budget cutbacks that many countries are making,” Chief Executive Officer Johan Molin said in the statement. “It is therefore of the utmost importance that Assa Abloy should continue its expansion on the new markets.”
Shares of Assa Abloy rose as much as 3.2 percent in Stockholm, the biggest gain since Jan. 2. It traded 1.7 percent higher at 295 kronor as of 10:04 a.m.
Sales in the Americas were supported by demand for high-security doors and electromechanical products. The Global Technology business expanded as clients ordered smart cards and access control systems that enable administrators to control access to secure areas through offline, online and wireless-control solutions. New products also added to sales, the company said.