Sandvik AB (SAND), the world’s biggest maker of metal-cutting tools, posted third-quarter operating profit that missed analysts’ estimates as weak metals prices and a strong krona weighed on demand from mining clients.
Operating profit fell to 2.5 billion kronor ($393 million) from 3.3 billion kronor a year earlier, the Stockholm, Sweden-based company said in a statement today. Analysts on average predicted operating profit of 2.86 billion kronor, according to 14 estimates compiled by Bloomberg. Revenue declined 13 percent to 20.4 billion kronor.
“Earnings were adversely affected by the decline in invoicing and reduced production rates,” the company said in a statement. The strong krona “impacted operating profit by 250 million kronor while changed metal prices had a further impact of 90 million kronor.”
Sandvik has been cutting jobs and closing factories to cope with low demand for its products as mining companies hold back on spending. Joy Global Inc. (JOY), the world’s second-biggest mining-equipment maker in August projected a decline in sales due to a slowdown in demand growth for metals and coal.
Sandvik fell as much as 1.8 percent and was trading down 1.4 percent at 89 kronor as of 8.21 a.m. in Stockholm.
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