Atlas Copco AB, the world’s largest maker of air compressors, reported higher-than-estimated profit in the third quarter and signaled demand is improving in European markets.
For the second straight quarter, earnings at the Swedish manufacturer hit a new high, Atlas Copco said in a statement Tuesday. Operating profit jumped 28 percent to 5.31 billion kronor ($640 million), buoyed by the Swedish krona’s weakness that’s boosting earnings of exporters. Analysts surveyed by Bloomberg estimated profit of 5.03 billion kronor.
Atlas Copco, whose products include rock drills and assembly systems for the manufacturing, mining and construction industries, forecast demand in the coming months will hold steady. European orders jumped 7 percent in local currency in the third quarter. Swedish industrial companies, including Assa Abloy, are benefiting from their historic client bases closer to home after chasing emerging market growth and finding slowing demand in countries such as China.
“Sectors such as aerospace and automotive showed good demand for our industrial tools and assembly systems, but mining, oil, gas sectors were weak,” Chief Executive Officer Ronnie Leten said in the statement.
Exchange rates had a positive impact of 670 million kronor on earnings. Revenue increased 9 percent to 25.7 billion kronor, compared with the 25.4 billion-krona average of 16 analyst estimates compiled by Bloomberg. Excluding acquisitions and currency effects, revenue was unchanged.
Atlas Copco shares traded 0.4 percent lower at 203.5 kronor as of 12:55 p.m.