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Investing.com -- Sweco’s (ST:SWECb) stock surged more than 8% on Friday following its fourth-quarter earnings report, which exceeded analyst expectations.
The strong performance was driven by robust growth in several key markets, improved operational efficiency, and a higher billing ratio.
The Swedish engineering and architecture consultancy firm reported net sales of SEK 8.1 billion for the quarter, marking a 5% year-over-year increase, with organic growth at 4% after adjusting for calendar effects.
In addition, EBITA increased by nearly 38% to SEK 901 million, exceeding consensus estimates by 6%, improving margins from 8.5% last year to 11.1%.
Growth was recorded across multiple regions, with particularly strong performances in the Netherlands, the United Kingdom (TADAWUL:4280), and Germany.
The Netherlands saw a 21% increase in net sales, while the UK posted a 20% rise. Meanwhile, Belgium and Finland struggled, with Finland reporting a 1% decline in sales. Margins improved across all segments except Sweden, where performance remained subdued.
Jefferies analysts flagged Sweco’s focus on operational efficiency as a key driver behind the earnings beat.
The company’s billing ratio improved to 74.6%, up from 73.3% a year earlier, while higher average fees contributed positively to the bottom line.
Demand for services in infrastructure, water, environment, and energy remained strong, though the building and real estate segments, particularly residential and commercial real estate, continued to face headwinds.
Despite the earnings beat and positive market reaction, Jefferies maintained its “hold” rating on Sweco, citing valuation concerns.