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Investing.com -- Shares of NKT A/S (CSE:NKT) fell by 2.5% as the company’s outlook for 2025 raised concerns among investors.
NKT’s fourth-quarter earnings report showed revenues surpassing expectations by 12% and operational EBITDA by 6%, primarily due to a significant increase in Solutions revenues aided by subcontracted work.
Despite the revenue beat, all divisions experienced weaker margins, attributed to project mix in Solutions and persistently low momentum in the low voltage segment of Applications.
The high voltage (HV) order backlog remained stable year-on-year (YoY), with management highlighting robust activity projected through 2025.
The company’s forecast for 2025, however, fell short of consensus estimates at the midpoint. NKT projected revenues at standard metal prices to be between €2.37 billion and €2.52 billion, slightly below the consensus of €2.49 billion.
Operational EBITDA expectations ranged from €330 million to €380 million, compared to the consensus estimate of €366 million. This guidance represents a 2% shortfall in revenues and a 3% shortfall in operational EBITDA at the midpoint.
Despite management’s reputation for conservatism and the expectation for consensus estimates to edge towards the higher end of the guidance, implying low single-digit upgrades, the initial reaction to the outlook has been negative.
The high voltage order backlog was reported at €10.6 billion, maintaining stability YoY, and does not include booking commitments exceeding €3.5 billion. Management anticipates continued strength in the high voltage market, a subdued but improving environment in the low voltage sector, and sustained momentum in the medium voltage market.
Jefferies, a financial services company, commented on the report, stating, "we would expect cons to move closer to top-end."
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