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Investing.com -- Hexagon AB stock gained 3.7% after the company reported better-than-expected organic revenue growth for the second quarter, offsetting margin pressure and an earnings miss.
The Swedish technology group posted 3% organic growth in the second quarter, surpassing analyst expectations of approximately 1%. The Manufacturing Intelligence segment was a standout performer with 3% growth, while other segments also showed slightly improved results compared to forecasts.
Despite the revenue beat, Hexagon faced significant margin contraction of approximately 3.2 percentage points year-over-year. The company’s adjusted EBIT missed consensus estimates by 1%, with currency headwinds weighing on profitability.
"We would see the better than expected top-line result offsetting the EBIT miss today, and for the stock to trade up low-single digit %," analysts at Morgan Stanley (NYSE:MS) noted in their assessment of the results.
The stronger performance came against easier year-over-year comparables, helping the company exceed revenue expectations. However, the margin pressure suggests ongoing challenges in converting the revenue growth to bottom-line results.
Looking ahead to the second half of 2025, analysts don’t expect significant revisions to consensus estimates for organic revenue growth, though margin forecasts may be adjusted downward to reflect the foreign exchange and profitability pressures demonstrated in the second quarter results.
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