Swedish metal-cutting tools and mining equipment maker Sandvik has seen a smaller than expected rise in third-quarter core profit and a decline in order intake.
The company’s quarterly adjusted operating profit grew to 5.82 billion Swedish crowns ($527.81 million) from 5.52 billion a year earlier but lagged the mean forecast in an LSEG poll of analysts of 5.97 billion crowns.
Sandvik said it continued to see solid, broad-based demand in aerospace, with stable development in the automotive sector. However, the demand in general engineering was subdued, it said, pointing to a softer market and de-stocking dynamics.
“We have seen weakening market dynamics in some of our customer segments leading to lower volumes,” CEO Stefan Widing said in a statement.
Order intake for the quarter fell by 1% to 28.93 billion crowns from 29.23 billion a year ago, excluding acquisitions the orders declined by 7%, Sandvik said.
Jefferies said the quarterly order intake was a 5% miss compared to the consensus, noting that mining demand was normalising.
The CEO said in a call to journalists that the company had managed to offset rising inflation so far, but expected it to continue to be a challenge in the following year and also saw higher labour costs for 2024.