Schindler falls after Q3 orders, revenue miss

Investing.com -- Schindler Holding AG shares fell more than 2% on Friday after the elevator and escalator maker reported weaker-than-expected third-quarter orders and revenue, even as it raised its 2025 profit outlook.

Orders rose 0.7% in local currencies to CHF 2.64 billion, coming in 1.2% below consensus expectations of CHF 2.67 billion. 

The decline was mainly linked to China, where demand dropped by double digits as the company saw fewer large projects and maintained stricter price discipline. 

By contrast, peer Kone reported a 7.8% increase in orders, supported by a rebound in its modernization segment after a weaker second quarter.

Modernization orders at Schindler grew 16% year over year, and service orders expanded at a mid-single-digit rate. New installation orders declined by more than 10%, reflecting continued weakness in China. 

In the Americas, service orders fell by a low-single-digit percentage after a similar increase in the previous quarter. In China, modernization orders grew by more than 10% during the quarter. In the EMEA region, new installation orders rose 5% to 10% after falling by a similar range in the prior quarter. 

The company’s order backlog increased 1.5% year over year in local currencies to CHF 7.99 billion, compared with CHF 8.01 billion at the end of the second quarter.

Revenue fell 0.5% in local currencies to CHF 2.67 billion, about 1% below consensus expectations of CHF 2.70 billion. 

Jefferies said the decline was partly due to tougher comparisons in the modernization segment, which recorded mid-single-digit growth, and weaker revenue recognition in China.

Adjusted EBIT rose 4% from expectations to CHF 372 million, ahead of the CHF 358 million consensus. The adjusted EBIT margin reached 13.9%, 63 basis points above expectations. 

The margin improvement was attributed to operational efficiencies, pricing, and product mix. Operating cash flow increased to CHF 264 million from CHF 257 million a year earlier.

Schindler raised its full-year 2025 outlook and now expects a reported EBIT margin of about 12.5%, up from its earlier forecast of about 12%. 

Revenue growth guidance in local currencies remains at very low single digits. Jefferies said the higher guidance implies a 1% to 2% increase in fourth-quarter adjusted EBIT versus consensus estimates, helped by a lower restructuring expense forecast of CHF 50 million to CHF 60 million, compared with a previous estimate of CHF 70 million.

The company reaffirmed its midterm goal of achieving a 13% reported EBIT margin. Jefferies noted that Schindler’s market outlook improved for the Americas, where new installations are now expected to be stable compared with a previous 0.5% decline. 

Globally, new installations are still projected to fall between 5% and 10%. Kone, by comparison, expects Americas installations to grow between 0% and 5%.