Techtronic Industries Shares Fall Sharply After First-Half Profit Decline
By Sherry Qin
Techtronic Industries' shares fell sharply Thursday after the power-tool maker reported a first-half profit decline and guided for slower revenue growth for a key segment.
Techtronic shares were last down 17% at 80.55 Hong Kong dollars (US$10.30) after earlier touching HK$75.60, and are on track for their biggest one-day percentage loss since January 2009.
In a filing after market close, Techtronic reported net profit of US$478.5 million for the first six months, down 18% from the year-earlier period. Revenue declined 2.2% to US$6.88 billion.
Citi said in a note that the company's revenue decline was in line with expectations, but profit fell short of its forecast for just a marginal decline.
Further, management lowering guidance for its key professional power-tool brand Milwaukee was "a key surprise," said Citi analysts Eric Lau and Alice Cai.
Techtronic trimmed revenue guidance for the Milwaukee business to a range of high single digits to low double digits over the next three years, from prior guidance of mid-to-high teens, as some industry verticals are slowing. A sluggish macroeconomic environment also could weigh on the business.
Citi opened a 30-day negative catalyst watch on Techtronic given expectations of a price correction following likely downgrades after the first-half result. The bank lowered its H-share target price to HK$108.00 from HK$130.00.
Techtronic derives a large portion of its revenue from the North American market. Home Depot is the company's largest customer, accounting for 48% of its 2021 sales.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
August 09, 2023 23:38 ET (03:38 GMT)
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