Hexagon fourth-quarter core profit edges forecasts, China still weak

STOCKHOLM (Reuters) - Industrial technology group Hexagon HEXAb.ST on Wednesday reported quarterly core earnings just ahead of market forecasts even as weak demand in China and a slowdown in some construction markets weighed on growth.

Organic sales fell 2% in the quarter as strong growth for design and asset management software at Hexagon unit PPM could not fully make up for a sharp drop in China, which the company said mainly reflected weaker demand in the manufacturing industry.

“Weakness in China and the slowdown in the automotive sector continued to hamper the Manufacturing Intelligence division,” CEO Ola Rollen said in a statement.

The maker of measurement and positioning systems and software, has seen very weak demand in its China business over the past 9 months, primarily in the electronics sector.

Hexagon’s organic sales in China dropped 21% in the quarter, compared with a 23% fall in the previous quarter.

Fourth-quarter adjusted operating earnings at the Swedish group rose to 277 million euros ($305.72 million), up from 271 million in the year-earlier quarter, and ahead of the 270 million mean analyst forecast in a Refinitiv poll.

The company’s sensors and software are used for measurement and quality inspection in manufacturing processes and in engineering plant design, and also in areas such as infrastructure planning, construction, mining, agriculture and energy.

Reporting by Johannes Hellstrom; Editing by Simon Johnson