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Investing.com -- VAT Group reported a softer-than-expected third quarter, with both orders and revenue missing consensus estimates. The company’s guidance also fell short of expectations, and it trimmed its full-year margin outlook.
Shares fell around 5% on the report.
Orders came in at 238 million Swiss francs in Q3, down 8% year-on-year and 4% quarter-on-quarter. The figure marks a 7% miss versus consensus expectations, according to RBC Capital Markets.
The core Valves division saw a 16% annual drop in orders and an 11% shortfall to consensus, while Global Services delivered a stronger performance with orders up 33% year-on-year and a 12% beat.
Revenue reached 258 million francs, up 23% from a year earlier but down 9% sequentially and landing at the bottom of guidance.
The book-to-bill ratio improved slightly to 0.92x from 0.88x but remained below 1.
The order backlog fell 33% year-on-year to 259 million francs.
VAT said semiconductor customers kept fab utilisation “persisting below 70%” and flagged that investment in mature nodes remains weak, even as leading-edge utilisation “recovered to above 90%” due to high-bandwidth memory demand.
The company also described China as highly fluid, noting that “the market dynamics there are more volatile and the competitive situation among domestic OEMs is in constant flux”.
Looking ahead to the fourth quarter, VAT guided revenue to 225–245 million francs, well below the market’s expectation of around 277 million francs, and signalled another quarter of book-to-bill below 1.
The company also cut its EBITDA margin view to "low end of 30-37% margin band," compared to the previous view of "above prior year margin," which was 31.2%.
RBC analysts described the Q3 print as “very soft” and said the reduction in backlog means that “even a demand recovery in Q1 for deliveries in Q2/Q3 will mean a soft start to the year."
They also questioned VAT’s optimism on China. “We are somewhat surprised that VAT still expects robust demand from China next year,” particularly after ASML warned of a “significant decline in Chinese demand.”
Consensus now looks too aggressive, analysts added, warning that expectations for a 27% increase in 2026 orders “now looks overly optimistic even if leading edge is ramping up"
Separately, Jefferies analysts highlighted "very weak Q3 orders, especially from semicap customers."
"We believe the recent share price rally is not supported by medium-term fundamentals," they noted.