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UPDATE 1-Hexagon cautiously upbeat as Q4 op profit meets forecast
February 12, 2013 / 8:26 AM / 5 years ago

UPDATE 1-Hexagon cautiously upbeat as Q4 op profit meets forecast

* Cautiously optimistic about 2013 following good start in Jan

* Proposes higher dividend than expected

* Q4 op profit 135 mln euros matches forecasts (Adds background, details)

STOCKHOLM, Feb 12 (Reuters) - Measurement technology group Hexagon AB said it was cautiously optimistic about 2013 after a good start to the year as it posted a rise in quarterly profits in line with forecasts.

The company, which sells under brands such as Leica Geosystems as well as its own name, also proposed a higher-than-expected dividend for the year.

“You can’t say January is the start of a trend, but we have started off well. It feels we are more firm on our feet now than in October and that one can now have some kind of optimism about 2013,” Chief Executive Ola Rollen told Reuters.

After investing some 11 percent of sales in research and development last year, Rollen said 2013 would be a year full of product releases. Its business is also becoming less cyclical as more revenues come from recurring software contracts.

Hexagon reported fourth-quarter operating earnings of 135 million euros versus 122 million in the year-ago quarter to match the mean forecast in a Reuters poll of analysts.

The company, which unveiled three smaller acquisitions in January alone, said revenues in the quarter rose to 629 million euros from a year-ago 592 million, just lagging the 634 million seen by analysts.

Customer demand in the engineering sector improved in Europe - its biggest market - in the fourth quarter compared to the third quarter. Growth in the Americas primarily came from a recovery in the U.S. construction sector coupled with strong demand in South America.

Asia demand also accelerated, with China the growth engine.

A steady stream of acquisitions and firm organic growth has made Hexagon the market leader in a specialised sector straddling software and engineering hardware, pitting it against rivals such as U.S. Trimble Navigation.

Hexagon proposed paying a dividend of 0.28 euros per share for 2012 compared to 0.17 euros a year earlier. Analysts had expected the company to raise its payout to 0.25 euros.

Hexagon’s shares were down 1.5 percent at 0823 GMT. (Reporting by Mia Shanley and Johannes Hellstrom)

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