Sweden's Hexagon tops profit forecast, but market uncertainty clouds outlook (updated)
25/07/2025 07:21
Hexagon says it largely offset tariff impact in Q2 Flags just over 2 mln euro hit, vs April estimate of up to 15 mln euros Operating profit beats consensus despite 10% drop Plans cost improvement programme Shares rise more than 5% Recasts with management comments on tariff impact and its mitigation in paragraphs 1-4, updates shares in paragraph 6 By Marta Frackowiak July 25 (Reuters) - Hexagon's HEXAb.ST operating profit fell less than expected after it managed to mitigate most of the negative tariff effects in the second quarter, the Swedish maker of measurement and positioning systems said on Friday. The impact of U.S. tariffs was just over 2 million euros ($2.35 million), said Executive Vice President Norbert Hanke, talking to analysts and press on a conference call. "This headwind was mainly due to the gap between tariff impact and price increases," added Hanke, who had served as Hexagon's interim CEO during the quarter. The impact, which Hexagon had in April estimated would be up to 15 million euros before mitigation, was also offset through optimization of logistics and assembly, he said. Despite this, Hexagon warned that uncertainty related to U.S. President Donald Trump's trade policies made it difficult to forecast results for the remainder of the year. Shares of the industrial technology group rose 5.2% by midday local time in Stockholm (1000 GMT). The main concern remains the tariff environment's impact on customer behaviours, Hanke said. That environment was most challenging in the Geosystems unit, which develops digital solutions used by customers in the construction sector among others, Hexagon's new CEO Anders Svensson said in the earnings statement. The company is also working on a cost improvement programme that will be implemented as soon as possible, he added. It reported a 10% drop in its adjusted operating earnings to 360.6 million euros, but beat the 358.1 million euro estimate from 12 analysts polled by LSEG. "Organic growth in the second quarter was 3%, as the divisions mitigated delays in customer decision making due to ongoing geopolitical uncertainty," Svensson said. That followed flat organic sales in the first quarter. Svensson also repeated the previously announced timeline for the planned spin-off of Hexagon's Asset Lifecycle Intelligence and Safety, Infrastructure & Geospatial businesses, with listing under the name Octave expected in the first half of 2026. ($1 = 0.8521 euros) (Reporting by Marta Frąckowiak in Gdansk; Editing by Milla Nissi-Prussak) ((marta.frackowiak@thomsonreuters.com))