Salem Radio Network News Tuesday, July 27, 2021

Business

Elevator maker Kone beats profit forecast, warns of chip shortage impact

HELSINKI (Reuters) – Finnish elevator and escalator maker Kone on Wednesday reported stronger-than-expected second-quarter operating profit and sales thanks to continued growth in China.

Kone’s shares rose 2% to 70.04 euros after the release of earnings.

The company, which said its full-year core earnings were on track to slightly exceed last year’s earnings, reported a rise in operating profit to 367.1 million euros ($433.10 million) from 315.5 million a year ago.

This beat the 345.8 million euro mean estimate of 14 analysts polled by Refinitiv.

“Activity remained high in China, and business conditions improved elsewhere, with the U.S. being a clear highlight,” Chief Executive Henrik Ehrnrooth said in a statement.

Kone’s order intake, an indication of future revenue, grew 16.2% year-on-year to 2.41 billion euros and sales rose 11% to 2.81 billion euros from 2.53 billion, beating the average estimate of 2.64 billion euros by 14 analysts.

Ehrnrooth added that the global supply chain environment remains challenging for Kone due to higher material and logistics costs and a semiconductor shortage.

“We expect logistics and component availability constraints to start easing towards the beginning of next year,” he said.

($1 = 0.8476 euros)

(Reporting by Essi Lehto, editing by Louise Heavens)

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