Sandvik 3Q Net Profit Beats Expectations But Warns On Strong SEK

    By Juhana Rossi 
 

Swedish engineering group Sandvik AB (SAND.SK) Thursday posted lower-than-expected drop in third quarter net profit, but highlighted that earnings were weighed by adverse metal prices and currency effects, items that will continue to have a negative impact in to the fourth quarter.

 
    MAIN FACTS: 

-Now sees FY capex at about SEK4 billion, down from the SEK5 billion estimate at the end of 2Q.

-Net profit was SEK1.63 billion, versus SEK2.10 billion last year, beating analyst's expectations of SEK1.55 billion.

-Earnings were negatively impacted by SEK250 million due to the strength of the SEK and by SEK90 million from changed metal prices.

-Business conditions for Sandvik's products remained largely unchanged in 3Q compared with 2Q despite the normal seasonal slowdown.

-Expects currency rates to hit 4Q operating profit by SEK350 million compared to last year.

-Expects metal prices will hit 4Q operating profit by SEK75 million.

-Revenue was SEK20.42 billion from SEK23.42 billion a year ago, and below SEK21.83 billion that was the average forecast in a FactSet survey of 13 analysts.

-Ebit was SEK2.53 billion from SEK3.33 billion a year ago and below the SEK2.70 billion forecast.

-Order intake was SEK20.22 billion, down from last year's SEK21.80 billion.

-Mining unit order intake fell 9% to SEK7.03 billion from SEK8.50 at fixed exchange rates.

-Shares closed Wednesday at SEK89, valuing the company at SEK111.53 billion.

Write to Juhana Rossi at [e-mail]

Order free Annual Report for Sandvik AB

Visit http://djnweurope.ar.wilink.com/?ticker=SE0000667891 or call [phone]

Order free Annual Report for Sandvik AB

Visit http://djnweurope.ar.wilink.com/?ticker=US8002122013 or call [phone]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires