Metso Stock Surges on Strong Q4 Earnings and Positive Guidance

Shares of Metso, the Finnish mining equipment maker, surged on Friday as the company reported better-than-expected fourth-quarter earnings and provided a positive outlook for its aggregates unit.

Impressive Performance

At 1315 GMT, Metso's shares were trading 10% higher at EUR10.50, leading the Stoxx Europe 600 index. The company's earnings before interest, tax, and amortization surpassed consensus estimates by 5%, while orders exceeded expectations by 2%. Citi analysts attribute this success to an increase in aggregates orders and better service orders in minerals and aggregates.

Global Energy Transformation Boosts Demand

Metso is optimistic about the future, expecting sustained demand for infrastructure and minerals due to the global energy transformation. The company acknowledges that customer decision-making was slower in the fourth quarter compared to the previous year, potentially influenced by economic and geopolitical factors.

Aggregates Business Shows Improvement

Metso reported a pickup in orders for its aggregates business towards the end of the year. As a result, the company now anticipates improved activity in this unit over the next six months. This revised outlook is a positive development, according to Citi analysts. They believe that this improvement, along with growth in services, could lead to a slight increase in overall consensus earnings before interest, tax, and amortization (Ebita) expectations.