A record order intake and a cleaner balance sheet weren't enough to stop profit-taking after this year's blistering AI-driven rally.
XP Power (LSE: XPP) shares fell 3% on Tuesday even as the power control products maker reported record third-quarter orders and nudged up its outlook for next year, a reminder that after a 92% year-to-date surge investors had come to expect nothing less than perfection.
Orders in the quarter hit £106.8m, up 93% year on year and 22% on the prior quarter, as semiconductor manufacturing equipment and industrial technology customers piled in. That pushed the book-to-bill ratio to 1.67x, a strong signal for future revenue, while quarterly revenue itself rose 11% to £63.8m.
The pullback looks less like a profit warning and more like a classic 'sell the news' reaction from a stock that has essentially doubled this year on the back of AI-linked semiconductor capital spending. With expectations already elevated, even standout order figures left some holders reaching for the exit.
Underneath the headline numbers, the balance sheet told an encouraging story: net debt dropped sharply to £4.5m from £47.7m just three months earlier, aided by the release of a £50m bond connected to the company's ongoing Comet litigation. Management now expects to reach a net cash position by the end of the year.
XP Power left full-year guidance unchanged but pointed to a stronger second half, and said the strength of its order book gives it confidence of coming in slightly ahead of market expectations in 2027. The company flagged that some customers may have ordered earlier than usual as industry lead times stretch out, a factor worth watching for signs of demand being pulled forward rather than genuinely accelerating.
This report is based on XP Power's announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Homa Appliances on Unsplash.