Sandvik 4Q Profit Rises; Sees Caution in Energy Segment Customers

By Christina Zander

STOCKHOLM--Swedish engineering company Sandvik AB (SAND.SK) Thursday said it sees "an increased level of caution" among customers in the energy sector as it reported a rise in net profit for the fourth quarter.

Sandvik, which makes tools for customers in the mining, construction and energy sectors, said net profit in the three months ended Dec. 31 was 1.50 billion Swedish kronor ($183 million), up from SEK46 million the same period last year. Analysts polled by financial information company Six expected a net profit of SEK1.55 billion.

In the last few years, Sandvik's profitability has been hit by low demand in the mining sector, and the company said global demand from the mining industry remained stable at a low level in the fourth quarter. But the falling price of oil is expected to weigh on the company in 2015.

"In the long term, we believe in the viability of our strategy to further grow our position in the energy segment, however short-term demand is likely to be hampered by a low and volatile oil price," said Olof Faxander, chief executive of Sandvik, in a statement.

Sandvik said sales in the quarter was SEK23.39 billion, up from SEK21.77 billion a year ago. Operating profit was SEK2.62 billion, up from SEK590 million a year ago.

Shares closed at SEK79.95 Wednesday.

Write to Christina Zander at [e-mail]

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