July 17 (Bloomberg) -- Atlas Copco AB, the world’s largest maker of air compressors, said order volumes in its flagship compressor technique division declined as customers requested fewer large units in the second quarter.
Order volumes in the compressor technique business fell 8 percent in the quarter, while Atlas Copco managed to raise prices 1 percent, the Stockholm-based company said today in a statement.
“The compressor order volume and price together were minus 7 percent, and that was a bit more negative than expected,” Martin Prozesky, an analyst at Sanford C. Bernstein & Co. in London, said by telephone. “It’s come down very sharply, and typically that translates into sales numbers pretty quickly. Compressor orders are linked to a weakening industrial cycle.”
Prozesky has an “outperform” rating on the stock.
Atlas Copco, which benefits when metals prices are high because miners buy more rock drills and blast-hole rigs, said it expects aggregate near-term demand for its products and after-market service “to remain at the current high level.”
Atlas Copco fell as much as 3.8 percent, the most since June 25, and was down 2.8 percent to 144.9 kronor as of 11:45 a.m. in Stockholm.
Net income rose to 3.61 billion kronor ($515 million) from 2.98 billion kronor a year earlier. The average estimate in a Bloomberg survey of 13 analysts was for profit of 3.51 billion kronor. Sales gained 17 percent to 23.4 billion kronor, beating the average estimate of 23 billion kronor.
“Overall demand remained on a healthy level,” Chief Executive Officer Ronnie Leten said in a separate release. “The strong performance of our service business means we will both sustain and continue to develop customer support and relations.”
Total orders rose 5 percent to 23.3 billion kronor, Atlas Copco said, and declined 2 percent excluding currency fluctuations and acquisitions.
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