* Sandvik Q1 profit 3.51 bln SEK vs 3.17 bln forecast
* Organic order intake up 16 pct in Q1, mining up 30 pct
* Sandvik shares rise 5.7 pct
(Adds CEO comments, background, details, shares)
STOCKHOLM, April 24 Engineering group Sandvik
on Monday reported a first-quarter operating profit
above market forecasts, supported by a recovery in its mining
gear business which helped to drive a double-digit rise in
The Swedish company, whose main rival is Atlas Copco
, is benefiting from a pickup in mining investment in
response to higher commodity prices and a generally stronger
global industrial demand backdrop.
Operating profit at the Stockholm-based group rose to 3.51
billion Swedish crowns ($397.9 million) from 2.41 billion a year
ago, beating a 3.17 billion mean forecast in a Reuters poll of
"We have a very strong quarter behind us," Sandvik Chief
Executive Bjorn Rosengren told conference call with journalists.
Sandvik shares were up 5.7 percent by 1257 GMT, compared
with a 1.7 percent gain before the results were released.
The company's order intake increased to 24.9 billion crowns,
with like-for-like-growth of 16 percent year-on year, soundly
ahead of a 22.8 billion crown forecast.
This outperformance was mainly due to 30 percent growth in
Sandvik's mining business, where the need for mining firms to
replace equipment after several years of squeezed capital
spending has begun to boost demand.
CEO Rosengren said Sandvik was currently seeing the
strongest demand from customers mining gold, silver and zinc.
Manufacturing gauges in markets like China, Europe and the
United States have hit multi-year highs in recent months, adding
to expectations of increased demand for Sandvik's products also
outside the mining industry.
The group's Machining Solutions division (SMS), the world's
largest maker of metal-cutting tools, also beat both earnings
and order forecasts for the quarter, and its North American
business returned to growth after many quarters of declines.
SMS accounts for around 60 percent of Sandvik's total
operating profit, while the mining division accounts for about a
Rosengren also said Sandvik had lined up two possible buyers
for separate parts of its loss-making Mining Systems business
and that Sandvik hoped to close those deals during the second
Sandvik announced in January that a deal to sell the
business had fallen apart.
Sandvik's shares are up 61 percent over the past year,
outperforming a 19 percent gain in the STOXX Europe 600
Industrial Goods & Services Index, and a 46 percent gain
for cross-town rival Atlas Copco.
($1 = 8.8217 Swedish crowns)
(Reporting by Johannes Hellstrom. Editing by Jane Merriman)