Reuters reported that Nexans posted a greater than expected drop in Q3 sales sending its shares sharply lower.
Revenue fell 15.6% from 2008 to EUR 988 million as the company suffered from lower demand as a result of the global economic slowdown.
CM CIC Securities said referring to Nexans business providing cables for power production, transmission and distribution that "The organic decline in Q3 sales shows deterioration from the H1 of the year with a significant fall in energy infrastructures."
Nexans shares were down 6.2% at EUR 53.53 euros in early afternoon trade the stock's lowest level since early October. The company has a market capitalization of around EUR 1.5 billion. Nexans was among the main losers on France's wider SBF 120 index .SBF120, while volume on the shares already represented 153% of the stock's 90 day daily average. The French group still expects a 2009 operating margin of about 6% and predicted it will be near breakeven at the net profit level, despite posting a H1 net loss of EUR 57 million due to restructuring costs.
Nexans has been hit by a slump in industrial demand during the global downturn since the end of 2008 but said that the Q3 confirmed signs of a recovery.
Mr Frederic Michelland CFO of Nexans said that "These figures confirm 2 trends, the continuing drop in volumes and a stable environment for prices after nine months of volume falls. This is an encouraging sign that also shows the group's deliberate policy to protect its margins."
