STOCKHOLM Securitas (SECUb.ST), the world's second-biggest security group, said on Friday it would step up investments this year in advanced surveillance technology solutions as it reported quarterly earnings well below market forecasts.
Profit before tax fell more than expected to 114 million Swedish crowns ($17.7 million) in the fourth quarter from a year-earlier 687 million on flat core sales. The mean forecast in a Reuters poll of analysts was for a 272 million profit.
Full year profit was down 30 percent on sales that were flat, excluding acquisitions. Sales actually contracted in France, Portugal and Spain in 2012.
"It's a weak report looking at the result. But on the positive side, cash flow is strong," Handelsbanken analyst Anders Tegeback said. "The largest deviation is in Europe and Mobile and Monitoring."
Shares in Securitas were down 4 percent at 0804 GMT.
Hit by large contract losses in austerity-hit Europe - which makes up more than half of group sales - and a stuttering U.S. economic recovery, Securitas has been slashing costs.
However, it has increased spending on high-tech solutions such as intelligent cameras.
Securitas hopes the labor-saving technologies will particularly catch on the United States, where a regulatory reform could lift guard costs 12-16 percent.
"In 2012 the sales of technology and security solutions represented approximately 6 percent of group sales. We have set a target to triple this share of sales, which I consider achievable by the end of 2015," Chief Executive Alf Goransson said in a statement.
Securitas, which lags Britain's G4S (GFS.L) by sales, said price hikes were on par with wage cost increases in the quarter. It proposed an unchanged dividend of 3 crowns per share
($1 = 6.4326 Swedish crowns)
(Reporting by Anna Ringstrom)