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UPDATE 1-Hexagon Q1 matches forecast as weak oil business clouds industrial pickup
May 2, 2017 / 12:57 PM / 7 months ago

UPDATE 1-Hexagon Q1 matches forecast as weak oil business clouds industrial pickup

(Adds CEO comments, shares, background, detail)

STOCKHOLM, May 2 (Reuters) - Measurement technology and software firm Hexagon posted first quarter core earnings roughly matching market expectations on Tuesday and said PPM, its division which relies most on the oil industry, had had another weak quarter.

* Hexagon Q1 operating profit, adjusted for non-recurring items, 175 mln euro ($191 million), up from 161 mln in the year-ago period, and slightly ahead of a 172 mln euro forecast in a Reuters poll.

* Q1 like-for-like sales up 3 pct, matching analyst forecasts.

* Like-for-like sales up 6 pct excluding oil and gas business, strong growth in industrial sector.

* Hexagon CEO Ola Rollen, in news agency conference call, says ”there is optimism in a lot of the areas where we operate“, reason to believe demand could continue to strengthen”.

* Hexagon PPM (Process, Power & Marine), which relies heavily on business from the oil and gas industry, weighed heavily on group growth, with an 11 percent organic sales fall.

* PPM accounts for 15 pct of Hexagon sales, it is the firm’s most profitable business.

* CEO Rollen says counts on PPM returning to growth in H2.

* CEO Rollen says believes PPM demand has bottomed out, costs to come down in coming quarters.

* CEO Rollen says hopes to sign first contract for Smart Build product in Q2, currently in negotiations.

* CEO Rollen says acquisition prices at high levels, has acquisition room of around 1.6 bln euros.

* Hexagon shares, which were roughly flat ahead of the results, down 1.6 percent at 1244 GMT.

* Shares up 17 percent YTD, with an 8 pct gain last week on the back of a string of strong earnings in the Swedish industrial sector from companies like AB Volvo and Atlas Copco.

* The company has gone through a turbulent period with main owner Melker Schorling announcing he will step down for health reasons as chairman and Rollen being charged with insider trading in Norway in a company unrelated to Hexagon. ($1 = 0.9161 euros) (Reporting by Johannes Hellstrom; Editing by Simon Johnson)

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