Atlas Copco sees firming near-term demand after Q2 profit beat

Credit: REUTERS/MICHAEL DALDER

Sweden's Atlas Copco forecast rising demand in the current quarter after reporting earnings above market expectations helped by brisk sales in the semiconductor industry and better than feared performance in its compressor unit.

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STOCKHOLM, July 16 (Reuters) - Sweden's Atlas Copco ATCOa.STforecast rising demand in the current quarter after reporting earnings above market expectationshelped by brisk sales in the semiconductor industry and better than feared performance in its compressor unit.

Shares in Atlas Copco, Sweden's most valuable listed company, still edged 1.6% lower in early trading in Stockholm but are up some 60% from March lows and hit new all-time highs earlier this month.

The company, a maker of compressors, vacuum pumps and industrial tools, said demand from chip makers, a big customer group for its Vacuum Technique unit, had stayed strong in the quarter while all other business areas had suffered from the effects of the COVID-19 pandemic.

"Despite the considerable effects on the global economy, caused by the ongoing COVID-19 pandemic, we have kept profitability and cash flow at healthy levels, which allows us to continue investing for the future," CEO Mats Rahmstrom said in a statement.

"Although the world's economic development remains uncertain, Atlas Copco expects that the near-term demand for the Group's equipment and services will improve somewhat compared to the level in the second quarter," the company added.

Second-quarter operating earnings fell to 3.89 billion crowns ($428 million) from 5.38 billion in the year-earlier quarter, beating the 3.72 billion mean forecast seen by analysts, according to Refinitiv data.

The operating profit was 4.48 billion crowns when adjusting for items affecting comparability, Atlas Copco said.

Order intake meanwhile dropped 17% on a like-for-like basis to 22.4 billion crowns, just short of the 22.5 billion crown seen by analysts.

($1 = 9.0932 Swedish crowns)

(Reporting by Johannes Hellstrom; editing by Niklas Pollard)

((johannes.hellstrom@thomsonreuters.com; +46850242388; Reuters Messaging: johannes.hellstrom.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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