STOCKHOLM – Sweden's Epiroc said on Tuesday it expected current levels of demand to prevail in the near term after it reported lower than expected quarterly mining equipment orders, sending its shares lower.
Epiroc, which competes against Sweden's Sandvik and Finland's Metso, said its order intake inched up to 10.06-billion Swedish crowns ($1.06-billion) in the first quarter, just below the 10.17-billion forecast in a poll of analysts.
While the company's service business developed in line with analysts' forecasts, orders at its equipment business were 5% below expectations.
Sandvik and Metso both reported a better than expected quarterly order intake earlier in April.
Epiroc Chief Executive Per Lindberg said in a statement that while customers continued to be active and relatively confident, uncertainties about wider economic development were lingering, with clients primarily investing in lower risk projects focusing on increased productivity and efficiency.
"We do not see any clear indications that the current market situation will change and expect that the demand will remain at the current level in the near term," Lindberg said.
Shares of Epiroc, which makes equipment such as drill rigs, loaders and haulers, were down 3.1% by 0800 GMT, compared to a 1.7% drop for Sandvik and a 0.7% decline for Metso.
"This was a decent quarter for Epiroc, but nowhere near the beats we’ve seen this earnings season from European mining equipment peers including Sandvik and Metso," Barclays said in a research note.
Epiroc's operating earnings were 1.93-billion crowns, up from 1.52-billion in the same quarter a year earlier and narrowly ahead of the 1.91-billion mean forecast in the poll.
Epiroc's stock had risen 4% since Sandvik reported its earnings on April 18. It is currently up 20% year-to-date.