Alfa Laval earnings beat, co sees better demand in fourth qtr

Sweden's Alfa Laval AB on Thursday said the current quarter's demand is likely to be slightly more than the previous one, after it reported better-than-expected third-quarter core profit, buoyed by strong growth in its services business.

Adds CEO comments, background, detail

STOCKHOLM, Oct 24 (Reuters) - Sweden's Alfa Laval AB ALFA.ST on Thursday said the current quarter's demand is likely to be slightly more than the previous one, after it reported better-than-expected third-quarter core profit, buoyed by strong growth in its services business.

The industrial machinery maker, engaged in manufacturing of heat exchangers, separators and ballast water treatment equipment, said demand in most of its end-markets had continued to be high in the third quarter.

"Despite the geopolitical uncertainty, Alfa Laval's end markets are expected to basically remain positive during the fourth quarter and demand is expected to increase somewhat compared to the third quarter," Chief Executive Officer Tom Erixon said in a statement.

The earnings before interest, tax and ammortization (EBITA) rose to 2.14 billion Swedish crowns ($222.03 million) during thte quarter, from 1.74 billion crowns a year ago. This beat the 1.96 billion crowns estimated by a Refinitiv poll.

"This doesn't change our view that we still have to maintain a high level of readiness to handle a possible downturn in the business cycle during 2020," Erixon told reporters.

Order intake dropped by 10% to 10.7 billion crowns, but was still slightly above the 10.6 billion mean analyst forecast.

"Overall, we view these as a solid set of results," Credit Suisse said in a research note, adding that Alfa Laval's fourth-quarter outlook should also reassure investors.

Alfa Laval shares rose 8% in early trading on Thursday. The stock has been fairly strong ahead of the results, rising 7% in October until Wednesday's close.

($1 = 9.6384 Swedish crowns)

(Reporting by Johannes Hellstrom, Editing by Helena Soderpalm and Rashmi Aich)

((johannes.hellstrom@thomsonreuters.com; +4687001008; Reuters Messaging: johannes.hellstrom.reuters.com@reuters.net))

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