UPDATE 1-Sandvik rides order intake rise, sees stable automotive demand
(Adds shares, details, background)
STOCKHOLM, Oct 23 (Reuters) - Sweden's Sandvik said on Tuesday order intake had improved significantly andbroadly with stable activity also seen in an automotive industryhit by recent wobbles as it posted quarterly core earnings justahead of forecast.
Worries over slowing global growth has hit the industrialstocks in recent months in the wake of weakening purchasingmanagers indices and slowing car sales in China amid itslingering trade dispute with the United States.
A fall in European auto registrations linked to tougher newemissions tests also has proved deeper than expected with manycarmakers such as Daimler and BMW recentlyissuing profit warnings."Underlying customer activity intensified in all three majorgeographical regions and improved in all customer segmentsbarring automotive and mining which remained stable," Sandviksaid in a statement.
Automotive is an important end-market for Sandvik,accounting for about 13 percent of group sales. With most thesesales generated at its high-margin Machining Solutions unit, thesector is even more important from a profit perspective.
Sandvik's Swedish industrial peer Atlas Copco onFriday reported weaker than expected earnings, and forecast adrop in fourth-quarter demand, driven by the automotive industryand the semiconductor industry. Third-quarter adjusted operating earnings at the maker ofmetal-cutting tools and mining gear rose to 4.59 billion crowns($510 million) from 3.34 billion crowns a year ago, beating a4.52 billion crown mean forecast in a poll of analysts.
Order intake at Sandvik, which competes with Sweden's Epiroc in mining equipment and U.S. firm Kennametal in metal-cutting, rose to 24.2 billion crowns, just lagging the24.6 billion crown mean poll forecast.
Sandvik shares were up 0.5 percent at 1022 GMT, comparedwith a 3.9 percent drop ahead of the results. Its shares down 14percent over the past month, in line with the fall in theEuropean industrials index.
($1 = 9.0044 Swedish crowns)
(Reporting by Johannes Hellstrom; editing by Niklas Pollard)
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