November 8, 2012 / 7:32 AM / 5 years ago

UPDATE 1-European downturn weighs on Skanska Q3 profit, orders

* Pretax profit 1.34 bln SEK vs forecast 1.44 bln

* Order bookings below forecast

* Says European market expected to remain weak

* Sees clearer signs of U.S. market upturn (Adds detail, background)

STOCKHOLM, Nov 8 (Reuters) - Skanska, the Nordic region’s biggest builder, posted a bigger-than-expected fall in quarterly earnings and order bookings on Thursday as sovereign debt woes dampened construction activity across most of Europe.

Pretax profit for the group stood at 1.34 billion Swedish crowns ($200 million) in the third quarter against a mean forecast in a Reuters poll of analysts for 1.44 billion and a year-ago 1.66 billion.

“The European markets are expected to remain weak, particularly for large new civil construction projects, and competition for these projects is intense,” it said.

Skanska has been banking on continued strong demand in the United States, where the housing market is on the mend after the headlong plunge in the 2008/2009 financial crisis, to help offset weakness in Europe.

The group, whose largest markets are the United States followed by its home base Sweden, said it expected the overall construction market to remain stable, but that there were large differences between regions and market segments.

It said the segment for small and medium-sized projects was relatively stable, particularly in Poland.

Residential and commercial construction was weakening in its Swedish and Finnish home markets, it said, noting that the outlook was brighter across the Atlantic.

“The improvement in the U.S. market is becoming increasingly clear and many projects are available for tender,” Chief Executive Johan Karlstrom said in a statement.

Order bookings of construction projects fell to 26.5 billion crowns in the July through September period to come in below the 30.1 billion seen by analysts. In the year-ago quarter, order bookings totalled 34.2 billion crowns. ($1 = 6.7040 Swedish crowns) (Reporting by Niklas Pollard)

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