Atlas Copco Sees Better Demand as Construction Eases Mining Drag
Atlas Copco AB (ATCOA), the world’s largest maker of air compressors, forecast an increase in demand this year as construction helps offset weaker orders from the mining industry.
“We see positive signs in the industrial and construction segments, while it is still challenging in the mining area,” Chief Executive Officer Ronnie Leten said in the statement.
Atlas Copco this year completed the $1.5 billion takeover of Edwards Group, broadening its client base into vacuum pumps for semiconductor production. Like other capital goods makers, it’s seen declining revenue from mining as projects get postponed. Caterpillar Inc., the No. 1 maker of mining gear, forecasts a 20 percent drop in sales to the industry in 2014.
Orders in the first three months of the year climbed 8 percent, with a “strong quarter” for Edwards, Atlas Copco said. Shares of the company added 2.3 percent to 194.6 kronor as of 11:41 a.m. local time.
The addition of Edwards helped Atlas Copco’s revenue rise 5.9 percent to 21.4 billion kronor in the first quarter. Analysts had estimated sales of 21.6 billion kronor. Net income declined 0.8 percent to 2.75 billion kronor, the Stockholm-based company said in a statement today. Analysts predicted 2.81 billion kronor, according to a Bloomberg survey of analysts.
Mining accounted for about 26 percent of Atlas Copco’s total sales last year.
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