After two intense weeks, the picture is starting to clear on how the giants of the Stockholm Stock Exchange have performed in the third quarter. Focusing specifically on the companies included in the OMXS30 index, 22 operating companies have now released their figures.
Half of these companies have exceeded analysts’ forecasts in terms of demand, measured as orders when companies report it, and otherwise net sales. A slightly higher percentage, 55%, have beaten profit forecasts.
This can be considered okay given that the prelude to the reporting period consisted of many early profit warnings from vehicle manufacturers and consumer companies. However, it is slightly lower than usual, and as usual, there is a large variation between companies.
For example, Electrolux missed expectations significantly on Friday, while Ericsson and Boliden are among the positive surprises, as shown in the table at the end of the article.
If we try to distill some clear overarching themes from this reporting period, we find three.
1. Banks have so far weathered lower market interest rates well, with SEB being a slight exception, and in combination with low credit losses and good transaction net income, they are significantly exceeding analyst forecasts. For shareholders in banks, this bodes well if they can handle the profit pressure from continued interest rate cuts while potentially getting a boost from other areas of a higher economic pressure next year.
2. The turnaround in industry and parts of the consumption chain that many believed would come in the second half of the year with the help of lower interest rates is being pushed forward. Sandvik, Atlas Copco, Trelleborg, Volvo Car, Alleima, and Electrolux are just a few examples of companies that have pointed to increased short-term uncertainty. At the same time, many quality companies are maintaining profitability quite well even if volumes are a bit weaker, leading us to the next point.
3. Generous reception of the reports. Market reactions among large companies have been quite generous, with some exceptions, even in cases where prospects have been cautious. In several cases, there have only been small declines in stock prices on soft industrial reports, while we have seen substantial gains in several banks. Our interpretation is that there is a fairly good underlying risk appetite and a willingness to wait for the turnaround until 2025, as long as it doesn’t appear to be much worse than the current situation.
The table below shows how stock prices have reacted on the reporting day, as well as deviations from consensus forecasts for sales and profits. For companies that reported on Friday, the prices were read around 3 PM.
| OMXS30 Companies| Stock Price Reaction on Reporting Day| Deviation in Sales| Deviation in Profit|
| — | — | — | — |
| ABB | 2.4% | 1% | 1% |
| Alfa Laval | 0.8% | 5% | -4% |
| Assa Abloy | -1.3% | -1% | 2% |
| Atlas Copco | -0.7% | -1% | -4% |
| Boliden | 1.7% | 3% | 30% |
| Electrolux | -14.9% | 1% | -67% |
| Ericsson | 10.8% | 0% | 33% |
| Essity | -0.8% | -1% | 1% |
| Evolution | 14.9% | 1% | 0% |
| Getinge | -5.0% | 3% | -13% |
| Handelsbanken | 8.0% | 3% | 12% |
| Hexagon | 3.6% | -2% | -3% |
| H&M | -4.6% | -2% | -23% |
| Nordea | 6.2% | 1% | 5% |
| Saab | 8.9% | 17% | 5% |
| Sandvik | -2.1% | -4% | -4% |
| SCA | 7.0% | 0% | 7% |
| SEB | -5.4% | 6% | 11% |
| Swedbank | 5.0% | 10% | 21% |
| Tele2 | -2.6% | 0% | 0% |
| Telia | 1.7% | -1% | 12% |
| Volvo | 3.5% | -4% | -6% |
| Average: | 1.7% | 1.6% | 0.7% |
| Median: | 1.7% | 0.5% | 1.0% |
Source: Infront
This data provides insights into how the OMXS30 companies have performed in the third quarter, shedding light on market reactions and deviations from expectations in sales and profits. The varied performance of these companies reflects the broader trends in the market and the economy, offering valuable information for investors and analysts alike. Title: The Rise of Cryptocurrency: A Revolution in Finance
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