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STOCKHOLM, April 20 (Reuters) - Sandvik met forecasts with a 12% rise in adjusted first-quarter operating profit on Tuesday, with the cutting tools manufacturer offering an upbeat assessment on the mining sector’s outlook.
The Swedish company reported record quarterly orders in its mining equipment business, which accounts for almost 40% of sales.
Chief Executive Stefan Widing told reporters that the company, which also serves the automotive sector, is “positive about the future” after a good start to the second quarter and expects mining business to remain strong “for quite some time”.
Widing added that the global semiconductor shortage that has forced global automakers to reduce production in recent months has not affected order intake.
Having climbed by almost 20% since the start of the year, Sandvik shares were down 4% at 1223 GMT.
Investment bank Jefferies said short-cycle demand had not improved much in the quarter.
“Sandvik noted risks to its ‘high order backlog’ on the back of supply chain constraints going forward,” it added in a note.
Sandvik, which provides a gauge of industrial demand given its broad customer base, said order intake rose 12% on a like-for-like basis to 25.85 billion Swedish crowns ($3.1 billion), with 1% organic revenue growth to 21.69 billion crowns.
The company, which competes with the likes of Epiroc and Kennametal, said adjusted operating profit rose to 4.17 billion crowns in the quarter from 3.73 billion a year earlier, beating a 4.16 billion mean forecast in a Refinitiv poll of analysts. ($1 = 8.4037 Swedish crowns)
Reporting by Helena Soderpalm Editing by Niklas Pollard and David Goodman