Arjo Sales Rise to 2,849 Million Kronor, Beat Forecasts Despite Lower EPS
Key Facts
Sweden's Arjo reported third-quarter 2026 sales of 2,849 million Swedish kronor, beating revenue forecasts shown on Investing.com, in results released on the morning of October 22 that showed improved operating performance alongside lower earnings per share. Sales in the corresponding period of 2025 were about 2,646 million kronor, according to the company's statement. Revenue forecasts published on Investing.com stood at 2.75 billion kronor for the third quarter. The company recorded organic sales growth of 6.0% during the period, according to its official results. Organic growth thus accelerated from 4.7% in the second quarter of 2026, according to Investing.com's coverage of that quarter's earnings call.
Adjusted operating profit rose to 247 million kronor in the third quarter from 165 million a year earlier, according to Arjo. The result also exceeded second-quarter profit of 211 million kronor, according to Investing.com's coverage of the previous period's results. Adjusted operating profit in the second quarter of 2025 was 208 million kronor, making the third quarter's year-on-year improvement more pronounced than that recorded in the previous quarter. Adjusted earnings before interest, taxes, depreciation and amortisation rose to 523 million kronor from 436 million in the third quarter of the previous year. Meanwhile, cash flow from operations increased to 485 million kronor from 446 million in the corresponding period, according to the statement.
Gross margin rose to 43.0% in the third quarter from 41.1% a year earlier, supported by tariff-related factors and an improved sales mix, according to the company's quarterly report. These factors included refunds of U.S. tariffs totalling about 35 million kronor. Arjo also benefited from an 11 million kronor reduction in tariff costs during the period. The report cited "positive sales mix effects", which helped offset higher material and freight costs. In the second-quarter results presentation, Chief Financial Officer Christofer Carlsson had attributed margin pressure to "unfavourable sales mix effects and inflationary pressure on freight and material costs during the quarter", according to Investing.com.
But the operating improvement did not extend to profit after financial items and before tax, which fell to 104 million kronor from 111 million in the third quarter of 2025. Arjo said financial items included a loss of 62 million kronor from the revaluation of its stakes in Atlas Mobility and Vepalas. Basic and diluted earnings per share fell to 0.21 kronor in the third quarter of 2026. That compares with earnings of 0.30 kronor per share in the same period a year earlier, according to the official statement. Earnings per share also fell short of the forecast of 0.395 kronor shown in Arjo's earnings table on Investing.com.
The new report coincided with Arjo's adoption of geographic reporting segments covering Europe, North America and International Markets, according to the company's announcement on the change in segment reporting. It said restating comparative figures under this structure does not change previously reported total sales or results. As part of its strategy, Arjo aims to increase operating profit by about 350 million kronor compared with 2025 by mid-2029, according to its Capital Markets Day presentation. The plan requires a one-off investment of about 370 million kronor. The company expects to incur most of this investment by 2027, according to the same presentation. Arjo scheduled a conference call to discuss the results at 08:00 Central European Summer Time on October 22, 2026, following the report's release that morning. The company plans to present updated financial targets during the first quarter of 2027.