Skanksa profits down for third quarter

Swedish construction group Skanska said on Thursday that its third quarter net profits plummeted to just half of the numbers reported a year earlier, blaming reduced capital gains on divestments, but beat market forecasts.

For the quarter the company reported a net profit of 973 million kronor, down from the 1.8 billion kronor it reported for the same period in 2004.

Before taxes, Skanska reported 1.2 billion kronor in profits, down from 2.4 billion last year, but above analyst expectations of 994 million.

In late morning trading on the Stockholm Stock Exchange, the company saw its stock price shoot up 4.4 percent to 118.50 kronor per share.

Skanska’s operating income in the July-September quarter meanwhile dropped to 1.13 billion kronor from 2.4 billion for the year-ago period.

On a positive note, the company’s revenue for the quarter remained almost unchanged at 32.2 billion kronor from 32.4 billion in 2004, well above analyst expectations of 30.1 billion.

In addition, order bookings soared 38 percent in the period “and several markets show significant improvements”, company chief executive Stuart Graham said in a statement.

“The earnings trend in Construction remains positive in most of our markets and the operating margin reached 3.1 percent in the third quarter,” he added.

Looking forwards, the company said it was “cautiously positive”.

In the office market, “Skanska has experienced an increase in leasing activity, which over time should lead to new projects being initiated”, the company said, adding however that in the residential market “the local planning process continues to be a restraining factor in a number of markets”.