ASSA ABLOY AB(OTCMKTS:ASAZY) was a notable mover during Wednesday’s trading session declining by 0.24% on huge volumes, which were 5 times the 30 day average. The stock has been trending higher and has outperformed the broader indices over the last year. ASSA ABLOY has been forming higher tops and higher bottoms and has broken above all intermediate resistance zones. The stock currently trades above its 50 day moving average. The oscillators, which measure momentum, are clearly indicating that bulls are using every dip in the stock as a buying opportunity. Traders see the stock heading to levels of $11.10.
ASSA ABLOY AB (OTCMKTS:ASAZY) announced earnings highlights for the recently concluded third quarter. As per the reports, the gross margin for the quarter was 38.69%, up from 38.62% during the same quarter in 2014.
Company’s operating margin for the quarter also rose to 18.89% in 3Q2015 compared to last year’s 18.80 percent.
Other Financial And Non-Financial Highlights
Overall revenues for the quarter were $2,059 million, whereas the net earnings were $243.94 million. When it comes to operating cash-flow performance, ASSA reported a positive growth of 192.66% on YOY basis. Even though overall earnings declined marginally, operating margin increased from16.81% to 16.83% during the quarter.
If all the financial numbers are monitored closely, one can find that the overall change in revenues on YOY basis was somewhat close to the change in earnings on YOY basis. The earnings of ASSA declined on a year-on-year basis, but it wasn’t due to any cost control contraction in gross margin. Both operating margins and gross margins showed growth during the same period when earnings declined, which’s a clear evidence that there’s something else than the margins that affected the earnings.
One can question ASSA ABLOY’s cash position and analyze if its earnings are compared with cash position, do they represent any sustainable performance or not? Operating cash flow of the company increased by a whopping 192.66% on YOY basis, which suggests that there’s no notable performance in marginal earnings and reserves or accruals.
The senior management team of ASSA ABLOY is delighted to announce these financial results. There were many occasions when volatile market conditions hit its performance over the past few months, yet it managed to come out clean and report a reasonably good performance. It couldn’t have been possible if ASSA management refused to stick to its fundamentals throughout this period.
It will continue to make many more changes in the coming months to live up to customers expectations and improve financial performance. Details of these changes will be unveiled from time to time.