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Investing.com -- Trelleborg reported stronger-than-expected third-quarter earnings, supported by resilient margins and solid growth in its Sealing Solutions division, while maintaining a steady outlook for the final quarter of the year.
Shares in the Swedish engineering group jumped more than 5% in Stockholm following the release.
Sales rose 1% year-on-year to 8.53 billion Swedish kronor, broadly in line with expectations, while adjusted EBITA increased 5% to 1.54 billion kronor, around 2% above the Infront consensus cited by Kepler Cheuvreux.
The group’s operating margin improved to 18.1%, compared with 17.3% a year earlier. Organic growth reached 4%, double the market’s 2% forecast.
By division, Sealing Solutions delivered a 6% earnings beat with a 20.7% margin, while Industrial Solutions lagged expectations slightly. Medical Solutions saw a 3% sales increase and met profit forecasts.
Operating cash flow rose to 1.74 billion kronor, and net debt-to-EBITDA stood at 1.1 times by quarter-end.
Trelleborg said it expects demand in the fourth quarter to remain broadly in line with the third, citing ongoing market uncertainty tied to geopolitical developments.
Kepler Cheuvreux analyst Johan Sjöberg said the “margin beat drives 2% higher adj. EBITA” and added that consensus estimates could rise by 1–2% following the results.
"Although market uncertainty remains, our assessment is that demand in the fourth quarter will be on a par with the third quarter," he said.