FLSmidth Drops on Mining Gear Demand Concerns: Copenhagen Mover
FLSmidth & Co. A/S (FLS), the Danish maker of cement plants and mining equipment, fell for a second day in Copenhagen trading after Swedish rival Sandvik AB (SAND) said investments by mining companies remained low.
FLSmidth fell as much as 3.1 kroner, or 1.1 percent, to 268.40 kroner. The stock traded down 0.3 percent at 270.80 kroner at 11:47 a.m. in the Danish capital with trading volumes at 16 percent of the three-month daily average.
Sandvik, the world’s biggest maker of metal-cutting tools, today reported a 33 percent decline in second-quarter profit. The “low investment levels from miners continue to be noticeable for this part of our business,” Sandvik Chief Executive Olof Faxander said in today’s earnings statement.
While BHP Billiton Ltd. (BHP) and other top miners have reported increased output, mineral prices haven’t yet recovered. Any signs of a recovery in equipment demand are probably at least a couple of months away, Atlas Copco AB (ATCOA)’s Chief Executive Officer Ronnie Leten said yesterday in an interview.
Atlas Copco, the world’s largest maker of air compressors, reported a 9.1 percent drop in second-quarter sales yesterday. Joy Global Inc. (JOY), the world’s second-biggest mining-equipment maker, cut its full-year earnings forecast on May 30.
“We see a risk that FLSmidth shares will fall leading up to the earnings report on Aug. 23,” Mikkel Petersen, an analyst at Nordea Bank AB, said. “Sandvik confirms our cautious stance on suppliers to the mining industry.”
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