Sectra hits bottom of STOXX as earnings growth disappoints

SECTRA AB

05/09/2023 09:27

** Shares in Sectra  SECTb.ST  fall 11% to the bottom of the
STOXX 600 index  .STOXX  after the Swedish technology company
posted Q1 results, with analysts saying earnings growth lags
sales development
    ** "Although sales are growing rapidly, earnings are not
keeping pace, creating a negative reaction in the stock given
the very high valuation," Carnegie analyst Kristofer Liljeberg
says 
    ** The company's Q1 net sales rose 20.6% year-on-year to
583.7 million Swedish crowns ($52.67 million), while the
operating profit rose 7.6% to 69.3 million
    ** Its operating margin fell to 11.9%, from 13.3% a year
earlier
    ** Stifel analyst David Vignon says Sectra's EBIT came in
22% below consensus and 38% below his expectations, and notes a
slowdown in recurring revenue growth
    ** Vignon adds that these factors are not alarming, but as
Sectra "trades at an absurdly high valuation" a weak quarter is
not good for the share price
    ** Sectra shares are on track for their worst day in nine
months 


($1 = 11.0819 Swedish crowns)

 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))