David Herro Comments on Konecranes

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Sydnee Gatewood
Apr 13, 2021
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Finnish engineering firm Konecranes (

OHEL:KCR, Financial), which specializes in overhead lifting equipment, was a top contributor to the Fund's returns in the first quarter. In February, investors responded favorably to Konecranes' fourth-quarter earnings report and guidance for 2021. During the fourth quarter, the company's sales and adjusted earnings exceeded consensus estimates by over 10%, primarily driven by outperformance in the industrial equipment business. This segment's significantly increased profitability indicates that management's efforts to structurally improve the segment are beginning to pay off. The stronger profitability was driven by cost-cutting efforts (factory closures and efficiency measures), successful new product platforms and an increased focus on the process crane business. Konecranes' service division, its highest quality segment, also delivered a record EBITA margin in the fourth quarter that surpassed our forecasts. In its earnings release, Konecranes pointed to signs of increased demand and it expects net sales to increase year-over-year in 2021 with improving EBITA margins. We believe the company remains an attractive investment positioned for long-term growth and profitability.



From

David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) Fund's first-quarter 2021 commentary.



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I am the editorial director at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg