UK Markets close in 4 hrs 45 mins

Sweden's Atlas Copco profit beats forecast on robust demand

·1-min read
FILE PHOTO: Atlas Copco headquarters are pictured outside Stockholm

By Helena Soderpalm

STOCKHOLM (Reuters) - Swedish engineering group Atlas Copco reported second-quarter earnings on Tuesday which beat market forecasts on the back of strong demand, sending its shares 3% higher.

The company has seen rising demand from chipmakers amid a global shortage of semiconductors over the past quarters, but higher costs and supply chain problems have hindered it from fully capitalising on it.

Atlas cautioned that it expected customers' activity level to drop in the near-term. CFO Peter Kinnart told analysts and journalists, however, that the company had not seen any weakness so far.

Having fallen around 35% so far this year, Atlas shares rose 3.4% on the day by 1333 GMT. Jefferies said the company had posted "a very solid set of results".

"In light of other industrials reporting a beat was expected but perhaps not of this magnitude," the investment bank said in a note.

Atlas Copco, which makes compressors, vacuum pumps and industrial tools, said demand for its products and services remained strong, with higher order volumes in all business areas year-on-year.

The company reported an adjusted operating profit of 7.04 billion Swedish crowns ($686.4 million), up from 6.03 billion a year earlier, beating the 6.88 billion crown mean forecast in a Refinitiv analyst poll.

Like-for-like quarterly order intake rose 13% on the year to 41.0 billion crowns.

($1 = 10.2570 Swedish crowns)

(Reporting by Helena Soderpalm; editing by Kirsten Donovan and Bernadette Baum)