Investing.com -- Holcim (SIX:HOLN) shares climbed 2% Friday after the Swiss building materials supplier reported Q3 operating profit above analyst expectations, as improved profitability helped to counteract a decline in sales.
Holcim, which is set to spin off its North American operations next year, posted a recurring operating profit of 1.67 billion Swiss francs ($1.93 billion) for the third quarter, slightly above analyst estimates of 1.65 billion francs based on company consensus.
Higher profit margins, which rose to 23.5% from 21.8% the previous year, supported this result.
Holcim’s increased focus on selling more of its higher-margin products, including low-carbon cement, roofing, and other building materials, helped offset a 3% decline in revenue to 7.12 billion francs, below expectations of 7.19 billion francs.
“Our Q3 results confirm Holcim's strong earnings profile, with broad-based growth drivers delivering record recurring EBIT and a record margin,” CEO Miljan Gutovic said in a statement.
Holcim reaffirmed its full-year outlook, aiming for low single-digit growth in sales in local currencies and a higher growth rate in recurring operating profit.
“All-in-all these results feel like a tick in the box with limited impact to FY24 consensus or the underlying investment case,” Jefferies analysts commented.
Citi analysts shared a similar sentiment, saying the Q3 print was broadly in line with expectations “and hence we do not see meaningful changes to consensus earnings estimates on the basis of these results.”