Sandvik 1Q Net Profit Disappoints as Mining Demand Remains Weak

   DOW JONES NEWSWIRES 
 

Swedish engineering group Sandvik (SAND.SK) Friday reported a weaker than expected net profit for the first quarter as weak demand in the mining sector continued to weigh on the company.

 
   MAIN FACTS: 

-"The negative effects of the downturn in the mining industry and the current weak performance of Sandvik Construction are largely being offset by the improving conditions for and enhanced performance of Sandvik Machining Solutions, Sandvik Materials Technology and Sandvik Venture," said Chief Executive Olof Faxander in a statement.

-Net profit for the first quarter was largely flat at SEK1.49 billion, compared with SEK1.48 billion in the same period last year. This was weaker than the SEK1.58 billion analysts polled by Factset had expected.

-Sales came in at SEK20.78 billion, down 6% from SEK22.10 billion last year. Analysts saw sales at SEK21.29 billion for the first quarter.

-Operating profit was SEK2.48 billion, down from SEK2.26 billion in the same period last year and worse than analysts' expectations of an operating profit of SEK2.61 billion.

-In its guidance for the second quarter Sandvik estimates that currency effects will impact operating profit negatively by about SEK150 million compared with the second quarter of 2013.

-It also said operating profit for the second quarter will be positively affected by about SEK100 million from currency rates, stock levels and metal prices.

-Financial items are seen between SEK1.8 billion and SEK2.0 billion in 2014.

-Shares closed at SEK95.35 Thursday

Write to Christina Zander at [e-mail]

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