(Updates with more detail, analyst comment, shares)
HELSINKI Feb 3 Finnish engineering group Metso
on Friday reported fourth-quarter profit below market
expectations, a sign that demand from its mining customers is
not picking up despite a recovery in commodity prices.
The maker of grinding mills and crushers for miners as well
as valves and pumps for the oil and gas industry has been
battling tough market conditions resulting from miners' spending
cuts and uncertainty over growth in top metals consumer China.
Hurt by lower volumes and project overrun costs at its
minerals business, Metso's fourth-quarter profit slumped 30
percent from a year ago and net sales fell 10 percent to 676
million euros ($727 million), well below analyst estimates in a
The company said it expected its overall market to improve
slightly in 2017, but remain weak for mining equipment and
satisfactory for mining services.
"The year has started in a relatively positive way, but it
is still too early to announce a meaningful recovery," Chief
Executive Matti Kahkonen said in a statement.
The company's shares were down 5.4 percent at 1015 GMT.
Metso's cautious outlook contrasts with its Nordic rivals
Atlas Copco and Sandvik, which reported
strong fourth-quarter results on the back of rising orders from
The Swedish mining gear makers both said they expected
demand from the mining industry continue to improve in the near
"The companies involved in quarrying and ore finding are the
first to benefit from the rising commodity prices, and Metso is
further down the chain," said Pekka Spolander, analyst at OP
Equities, which has an "accumulate" rating on the stock.
(Reporting by Tuomas Forsell and Boleslaw Lasocki. Editing by