Economy. Workshop Group Atlas Copco’s operating profit was higher than expected. New orders surprised positively. The share lifts with nearly four percent on the Stockholm Stock Exchange.
Atlas Copco reported a pretax profit of 4.42 billion kronor for the second quarter of 2016. That compares with profit of 4.85 billion kronor a year ago.
Operating profit landed at 4.775 billion crowns. It was about 340 million more than analysts on average had expected, according to Reuters.
Turnover amounted to 25.438 billion kronor, compared with 26 111 million a year earlier.
Order intake declined by three percent to 25.934 billion crowns. It was better than analysts had expected. The average forecast was 25 253 million. A shares had a good hour after the release risen by almost four percent.
The CEO sees bright spots
Atlas Copco expects demand to come will remain at the current level.
According to the company, demand for industrial compressors and tools sound, while low activity in building and construction and cutbacks in the mining industry affected the activities of equipment and service.
“Bright spots in the quarter include Asia, especially India, where all business grew, “writes CEO Ronnie Leten in a statement.
” Low expectations “
Atlas Copco’s results are better than what the market expected, mainly due to the expectations have been so depressed before, think Anders Roslund, engineering analyst at Swedbank. Good demand for its industrial compressors are another reason for good results, he believes.
As with Sandvik impacted Atlas Copco’s share at the beginning of the year, hurt by its exposure to the mining industry.
– But even on the mining side, the company has turned out to be better than expected, says Anders Roslund, and guessing it is because metal prices have recovered from low levels.
the future of the company looks bright, he predicts.
– It is a well-run companies that deliver good and will get better margins.
“braked expenses”
Peder Frölén, engineering analyst at Handelsbanken, says that Atlas Copco’s efficiency is the reason that the report was unexpectedly strong.
– first, you manage to curb costs. It is not due to better demand but that it managed to reduce costs so quickly. The debacle in the report are North America, where the company is weak on the industrial side. Something that may be because customers do not dare to invest, says Peder Frölén said.
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