First-quarter profit rise at Sweden's Sandvik marred by mining miss
STOCKHOLM, April 24 (Reuters) – Swedish engineering group Sandvik beat first-quarter operating earnings expectations on Tuesday boosted by strong results in its metal-cutting tools business, the group's main profit generator. But results in its mining gear business were slightly weaker than anticipated, taking some of the shine off the overall beat and sending shares lower after an initial rise.
At 1310 GMT, Sandvik shares were trading down 1.8 percent.
Sandvik, which competes with companies such as Atlas Copco in mining equipment and U.S. firm Kennametal in metal-cutting, has been riding booming mining gear demand and a rise in orders from many industrial segments since late 2016.
Its shares are still up more than 10 percent in 2018, outperforming a flat European industrial sector index.
Quarterly operating profit rose to 4.27 billion Swedish crowns ($502.4 million) from 3.50 billion, beating a 4.00 billion mean forecast in a Reuters poll of analysts. Chief Executive Bjorn Rosengren said the group's metal-cutting tools unit, seen as good gauge of demand from the broader industrial sector, racked up a "uniquely strong" performance in the quarter but he flagged steps to boost the mining unit's profitability.
"We have more to squeeze out there. Some of our businesses in there are not delivering the results we expect them to do going forward," he told reporters in a conference call.
Order intake at the company rose to 25.4 billion crowns, above the 24.6 billion crowns seen by analysts, with both its metal-cutting tools and mining businesses beating market expectations.
($1 = 8.4990 Swedish crowns)
(Reporting by Johannes Hellstrom; Editing by Jason Neely and Edmund Blair)