UPDATE 2-SGS H1 net misses forecast, confirms 2010 outlook

* H1 net 270 mln Sfr vs f’cast 276 mln

* Sales 2.35 bln Sfr vs f’cast 2.33 bln

* Confirms full-year outlook

* Shares seen opening down 1.3 pct

(Releads, adds analysts’ comments, share indication)

By Silke Koltrowitz

ZURICH, July 15 (BestGrowthStock) – SGS Ltd (SGSN.VX: ), the world’s
largest inspection services company, posted a less than expected
rise in first-half net profit, citing delays to investments by
the energy industry and a downturn in Spanish construction.

Net profit rose 5.9 percent to 270 million Swiss francs
($255.4 million) against an average forecast of 276 million in a
Reuters poll, the company said on Thursday. [ID:nLDE66B1H9]

“We can expect disappointed investors to take profits
because of almost euphoric price gains in recent days and today’s
slightly lower than expected figures,” said analyst Martin Koch
at Swiss private bank Wegelin.

Shares in SGS, which tests products and services for
companies and governments, were indicated to open 1.3 percent
lower in a firmer Swiss blue-chip SMI index (.SSMI: ), premarket
data provided by bank Clariden Leu showed. (CLPRE: )

The shares had risen to a record intraday peak of 1,585.0
francs on Wednesday.

SGS confirmed its forecast of increased sales and profit in
2010 after improving economic conditions boosted sales in the
second quarter.

Sales rose 1 percent to 2.35 billion francs, versus 2.33
billion in the Reuters poll, even as sales in the automotive
services unit fell sharply after the Irish government cancelled
a contract.

“The figures are broadly in line but I do not see a reason
for enthusiasm,” Vontobel analyst Jean-Philippe Bertschy said,
adding net profit was slightly below his expectation.

“They confirmed the outlook as expected. Minerals and
consumer testing were positive but industrial services and
automotive were weak,” he said.

Competitor Intertek (ITRK.L: ) struck an upbeat note when it
reiterated its full-year targets in May. [ID:nLDE6461DN]

SGS shares trade at 17.5 times estimated 2011 earnings, a
premium to rivals Bureau Veritas (BVI.PA: ) at 16.3 and Intertek
at 16.4.
(Editing by David Holmes)
($1=1.057 Swiss Franc)

UPDATE 2-SGS H1 net misses forecast, confirms 2010 outlook