STOCKHOLM (Reuters) - Sweden’s Epiroc (EPIRa.ST) reported a smaller-than-expected third-quarter operating profit rise and a fall in organic order intake, sending shares in the mining equipment maker down 9% early on Friday.
“Equipment orders from infrastructure customers were particularly soft,” CEO Per Lindberg said in a statement.
“Our mining customers are cautious and investment decisions are being postponed.”
The company, spun off from Atlas Copco in 2018, said organic order intake fell 6% and warned it expected demand in the final months of 2019 to remain at about the same level as in the third quarter.
“The economic environment continues to be uncertain,” Lindberg said.
In contrast, rival Sandvik (SAND.ST) beat earnings forecasts last week and posted a 5% rise in organic order intake at its mining unit.
“Overall we view this as a soft set of results and particularly in the context of the strong run in the share price into results,” Credit Suisse said in a research note on Epiroc.
“The demand outlook guide does not support Q4 orders and we expect the shares to be weak today.” JP Morgan analysts said.
Epiroc said it had cut staffing in recent months, mainly in manufacturing, and had identified further efficiency action which would be carried out in the coming quarters.
Restructuring accounted for much of the 233 million crowns in non-recurring costs recorded in the quarter, a hit missed by most analysts.
As a result, operating profit edged up to 1.93 billion Swedish crowns ($199.7 million) from 1.90 billion, short of the 2.24 billion expected by analysts, according to Refinitiv data.
($1 = 9.6635 Swedish crowns)
Reporting by Johannes Hellstrom; editing by Niklas Pollard and Jason Neely