Atlas Copco sees soft demand persisting after Q4 orders disappoint

By Marie Mannes

STOCKHOLM (Reuters) -Sweden's Atlas Copco on Thursday forecast demand would stay at its current weakened level in the near term, after its order intake missed expectations in the fourth quarter, sending shares down almost 4%.

The maker of industrial products such as power tools said overall demand in the fourth quarter had fallen from the quarter before as previously flagged, and that customer activity would remain at current levels in the near term.

JPMorgan said that given the first quarter is typically strong, the outlook "is at the low end of what could have been expected, and looks to imply some slowing underlying".

Order intake came to 36.8 billion Swedish crowns ($3.53 billion), lagging analysts' expectations for 39.0 billion crowns, with growth excluding acquisitions up 1%.

At its key vacuum division, which for the past year has dented the group's result due to weak demand, order intake fell 5% to 8.14 billion, excluding acquisitions.

Some analysts had ahead of the results been hopeful that demand for the unit's products would turn a corner in the quarter.

Demand from the division's semiconductor clients, some of its main customers, had however been relatively stable in the quarter, the company said.

The vacuum business, which competes with the likes of Pfeiffer Vacuum, is an important indicator for Atlas as it typically offers a forward-looking gauge of demand for the broader group.

Atlas proposed a 2023 dividend of 2.80 crowns per share, up from 2.30 crowns a year earlier and above the 2.69 crowns expected by analysts.

Shares in the company were down nearly 4% at 1152 GMT, having been up 1% shortly before the results.

Operating profit excluding items affecting comparability rose 24% to 9.96 billion crowns from 8.03 billion a year earlier, against a mean forecast of 9.65 billion in an LSEG poll of analysts.

($1 = 10.4253 Swedish crowns)

(Reporting by Marie Mannes; Editing by Anna Ringstrom and Jan Harvey)