(Reuters) - Swiss elevator and escalator maker Schindler posted a surprise fall in first-quarter net profit on Friday, hurt by higher material costs, wage inflation, and planned increase in expenditure on strategic projects.
Schindler’s shares were down 2.4 percent at 217 Swiss francs by 0702 GMT after it reported a net profit of 197 million Swiss francs, below the average of 215 million francs expected by analysts in a Reuters poll.
The company’s 2019 projects include the building-management start-up BuildingMinds established in March, which involves a partnership with Microsoft.
“With the outlook for a slowdown in some key markets and the fact that consensus expectations for Schindler’s margin development are still too high, we struggle to see positive triggers in the short-term,” Vontobel analyst Bernd Pomrehn said in a research note.
In contrast, Schindler’s Finnish rival Kone on Thursday reported higher than expected first-quarter sales, and bumped up its 2019 outlook, citing strong orders in China.
For the financial year 2019, Schindler reiterated its revenue growth guidance of between 4 percent and 6 percent in local currencies.
“Schindler will provide net profit guidance alongside its half year results but small downgrades seem likely after the Q1 miss,”, Liberum analyst Ryan Gregory said in a note.
Reporting by Bartosz Dabrowski; Editing by Subhranshu Sahu and Hugh Lawson