Finland's UPM Kymmene misses Q3 revenue expectations on low deliveries and high costs

UPM-Kymmene Oyj

Yesterday 07:57

Overview
Finland's material solutions firm's Q3 revenue missed analyst expectations and declined yr/yr
Q3 adjusted EBIT and adjusted EBITDA both missed analyst expectations
Company cites lower deliveries and higher variable costs as reasons for weak Q3 performance

Outlook
UPM expects H2 2026 comparable EBIT from continuing operations of €375-575 mln
Company expects lower delivery volumes and higher variable costs in H2 2026 versus H1 2026
UPM expects higher sales prices but increased variable costs in H2 2026 versus H2 2025

Result Drivers
DESTOCKING AND COST INFLATION - Co said customer destocking and increased variable costs weighed on Q3 performance
WORKING CAPITAL EFFICIENCY - Improved working capital efficiency contributed to strong Q3 operating cash flow
DECARBONIZATION SOLUTIONS - Co said good demand and pricing for renewable fuels supported performance in decarbonization businesses

Company press release: ID:nWkr89Lz2g

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Miss
EUR 2.20 bln
EUR 2.33 bln (10 Analysts)
Q3 EPS
 
EUR 0.14
 
Q3 Net Income
 
EUR 78 mln
 
Q3 Comparable  EBITDA
Miss
EUR 267 mln
EUR 333.03 mln (8 Analysts)
Q3 Comparable  EBIT
Miss
EUR 131 mln
EUR 204.45 mln (10 Analysts)
Q3 EBIT
 
EUR 112 mln
 

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 3 "hold" and 5 "sell" or "strong sell"
The average consensus recommendation for the paper products peer group is "buy"
Wall Street's median 12-month price target for UPM-Kymmene Oyj is €27.20, about 10.9% above its October 27 closing price of €24.52
The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 13 three months ago

Reuters Recommended Reads
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Oct 27 - Data centre boom drives Wärtsilä orders, but mid-term goals disappoint hungry market

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)