OSLO, Nov 27 (Reuters) - Nordic companies heavily
underperformed third-quarter earnings expectations as the global
financial downturn took bigger bites out of profits than
analysts had predicted, data compiled for Reuters showed.
The numbers reveal a 23 percent tumble in net results for
150 top regional companies in the July-September quarter,
against average forecasts for a 14 percent drop and a much more
moderate second-quarter fall of 7.5 percent.
Heavyweights like clothes retailer H&M, oil firm
StatoilHydro, cellphone maker Nokia and windmills producer
Vestas all disappointed the analysts.
Danish and Swedish companies took the worst hit, with net
earnings down 28 and 27 percent respectively, while Finnish
companies saw profits down 22 percent and energy-skewed
Norwegian ones came out top with a 15 percent decline.
NEED-TO-HAVE BEFORE NICE-TO-HAVE
Low valuations are also attracting some investors back into
the stock market.
"We've seen a net inflow of funds to date in November," said
Hogne Tyssoy who manages a Nordic fund at Norway's Holberg
Fondene, noting the cash is invested in low-debt companies
making "need-to-have" rather than "nice-to-have" products.
Holberg's biggest current investment in the region is in
Swiss-Swedish engineering group ABB, which also saw its shares
fall after a third-quarter earnings report on the weak side of
forecasts.
"We believe governments looking to counter the international
downturn will invest in energy infrastructure. ABB is well
positioned for that," Tyssoy said.
His top-five list of Nordic companies were rounded out by
Nokia and H&M plus Danish brewer Carlsberg and Swedish-American
wireless telecoms operator Millicom.
"Carlsberg is a quite new addition to our books. The share
has taken a hit over the company's Eastern European exposure,
but we believe the global downturn will result in more beer
drinking, not less, over the next few years," Tyssoy said.
The region's stock markets have taken heavy beatings in
2008, with the VINX Nordic index of the top 30 companies down 50
percent, compared with a drop of 44 percent in the FTSEurofirst
300 index of key companies across Europe.
The data for Reuters Nordics earnings polls are compiled by
Inquiry Financial Intelligence. For more details on the data,
please click on www.ConsensusEstimates.com.
(Editing by Andrew Macdonald)
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