HCA Red Flag: NKT's largest business area sells less and earns more (AI)
HC Andersen Capital
Summary
- NKT raised its 2026 earnings forecast to 400-430 MEUR, surpassing analysts' expectations of 406 MEUR, despite Distribution's underperformance with earnings of 27 MEUR against an estimated 31 MEUR.
- A 10 MEUR cost outside the segments impacted the group's total profit, resulting in 104 MEUR, which is below expectations and double the quarterly fluctuation guided by CFO Michael Yong.
- Sales were 8% below expectations at 657 MEUR, leading NKT to lower the top end of its full-year sales range to 2.75 BEUR from 2.78 BEUR.
- Transmission exceeded expectations with earnings of 67 MEUR, benefiting from a shift away from low-priced contracts, while key projects remain on schedule for 2027, supporting future profit growth.
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Automatic translation: Originally published in undefined 13/08/2026, 19:26 GMT. Give feedback here.
Red Flag · First reading of the financial report · AI-generated content
NKT A/S (NKT) · Q2 2026 · August 13
The share is up 22% in 2026 and 90% in the 12 months leading up to June 30, trailing rival Prysmian's 70%
Overall assessment
Positive reading
Positive reading Balanced Negative reading
The share should open higher: NKT raised its earnings forecast for 2026 to 400 to 430 MEUR, leaving analysts' 406 MEUR in the lower fifth of the new range. The counterpoint: The Distribution divisionen grew 1% vs. the up to 10% that the new capacity was expected to provide.
Red flags in the financial report
Distribution does not deliver the promised growth
Actual 27 · Est. 31 MEUR
Distribution, which manufactures medium-voltage cables for power grids and installation wires for construction, earned 27 MEUR vs. the expected 31 MEUR, and the margin fell to 11.0% from 13.0%. Sales grew 1% vs. the up to 10% that the new capacity in Denmark and Portugal was expected to provide, and NKT's own upward revision announcement attributes the increase to Transmission and Grid Solutions & Accessories without mentioning Distribution.
A cost outside the segments eats into the profit
Actual -10 · Guided ±5 MEUR
The three business areas collectively beat expectations by 7 MEUR, but a 10 MEUR cost booked outside of them resulted in a group total of 104 MEUR, which is 1 MEUR below. This is double the quarterly fluctuation CFO Michael Yong guides for, and almost no one models this item.
Sales 8% below, and the top end is decreased
Actual 657 · Est. 713 MEUR
Sales in standard metal prices, which adjust for fluctuations in metal prices, amounted to 657 MEUR vs. the expected 713 MEUR, as the Champlain Hudson Power Express connection in New York was completed. NKT simultaneously decreased the top end of the full-year sales range to 2.75 BEUR from 2.78 BEUR, meaning the upward revision comes with less volume behind it.
Green flags in the financial report
The upward revision leaves consensus at the bottom
New: 400 to 430 · Est. 406 MEUR
NKT raised its guidance for operating profit before depreciation for 2026 to 400 to 430 MEUR from 360 to 410 MEUR, which leaves the 12 analysts' 406 MEUR one-fifth up in the new range. The midpoint of 415 MEUR requires a second half above last year's 204 MEUR, so estimates need to be raised.
Transmission earns more on one-fifth less cable
Actual 67 · Est. 60 MEUR
Transmission, the high-voltage project business, earned 67 MEUR vs. the expected 60 MEUR on sales of 334 MEUR, one-fifth below last year, and raised the margin to 20.2% from 15.2%. This is the first tangible evidence of the shift away from the low-priced contracts from 2020 to 2022, but the financial report warns that earnings will continue to fluctuate with project phasing.
The 2027 assets are on schedule
Unchanged: all three ready in 2027
The high-voltage factory in Karlskrona, the expansion in Cologne, and the second cable-laying vessel NKT Eleonora all still have 2027 as their start date, and machinery is being installed and commissioned in Karlskrona. Analysts expect 553 MEUR in operating profit in 2027 and 745 MEUR in 2028 vs. the 400 to 430 MEUR for this year, so the dates hold most of the value.
Disclaimer: This is an HCA AI-generated research comment based solely on the company's published financial report. The comment does not constitute investment advice and should not be the sole basis for investment decisions. Investing in shares involves a risk of loss. Seek professional advice. /HC Andersen Capital, 21.27, 13.08.2026