Atlas Copco AB plunged the most in two years after the world’s largest maker of air compressors posted third-quarter profit that missed analysts’ estimates amid a decrease in mining equipment orders.
The shares fell as much as 5.6 percent, the biggest intraday decline since November 2011, and were down 3.8 percent at 184.90 kronor at 1:50 p.m. in Stockholm, where Atlas Copco is based. Net income dropped to 3.05 billion kronor ($482 million) from 3.48 billion kronor a year earlier, the company said today. Analysts on average predicted profit of 3.15 billion kronor, based on 14 estimates compiled by Bloomberg.
“Order intake for Atlas Copco’s equipment was lower compared to the previous year, primarily due to a significant decrease in orders received for mining equipment and partly due to fewer large compressor orders,” the company said. “Overall demand for the group’s products and services is expected to remain at the current level” in the near term.
The company said it would continue to reduce capacity for weak demand for mining equipment, with steps including job cuts. Most markets in southern and eastern Europe “had a negative development’ in the third quarter, and order intake from Australia fell “significantly” from the previous year because of less demand from the mining industry, Atlas Copco said.
Revenue declined 7 percent to 20.6 billion kronor in the quarter.
Atlas Copco, valued at 220 billion kronor, makes products from air compressors to rock drills and assembly systems for industrial, mining and construction companies.
The company was founded in 1873 to build railroads in Sweden and later added air compressors and diesel engines. It equipped the ship used by Norwegian explorer Roald Amundsen when his team was the first to reach the South Pole in 1911. One of the founders was financier Andre Oscar Wallenberg, who also established Stockholms Enskilda Bank in 1856. The Wallenberg family is still a major stakeholder through Investor AB’s holding.