Perhaps I should have listened to my gut feeling here. But buying before the numbers is always a risk. @TomTurboInvest
The industrial communications company HMS Networks achieved sales in line with expectations in the third quarter. However, the adjusted profit was significantly higher than forecast.
Sales increased by 12.9 percent to SEK 894 million (792). The result was in line with the Bloomberg analyst consensus of SEK 883 million. Organic sales growth amounted to 8 percent (-30).
Operating profit amounted to SEK 213 million (163). The operating margin amounted to 23.8 percent (20.6).
Adjusted operating profit amounted to SEK 244 million (194), compared to the expected SEK 193 million, with an adjusted operating margin of 27.3 percent (24.5).
Earnings per share amounted to SEK 3.26 (1.88). Adjusted earnings per share amounted to SEK 3.88 (2.51).
Order intake amounted to SEK 855 million (677). This represents an organic increase of 22 percent.
"Compared to the previous year, we are seeing positive signals in all key geographical markets. North America is driving sales growth, while order growth in all major markets is increasing by more than 20%," writes CEO Staffan Dahlström in the report.
Under "Outlook", Dahlström comments as follows:
"Uncertainty regarding tariffs, geopolitics and regulations continues to cause caution in some geographic markets. As before, we remain cautiously optimistic about the development potential in the current year, albeit with continued uncertainty regarding macroeconomic developments. In the long term, we believe that incentives and trends towards regionalized industrial production (North America, Europe, China and Southeast Asia) will create greater demand for automation, digitalization and communication for industrial applications - which is positive for HMS."
He continues:
"We are confident that we can continue to win new customers and grow our business with existing customers through continued investment in product development, innovation and sales resources. Organic and acquisitive profitable growth will be our priority in the coming years."
Increased tariffs have become part of everyday life, and the company is adapting by strengthening flexibility in logistics and increasing investment in the York, Pennsylvania facility. Certain products and production steps can be relocated to the US to reduce the impact of tariffs.
HMS Networks makes it possible to equip machines with AI capabilities by enabling the networking of machines, systems and data, which is a prerequisite for AI applications. The company offers hardware and software for industrial communication that makes it possible to collect and analyze data from machines and make it usable for AI applications. Examples of this include the visualization of machine data for monitoring and the integration of AI into the network monitoring itself.

