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STOCKHOLM, Oct 23 (Reuters) - Sweden’s Sandvik said on Tuesday order intake had improved significantly and broadly with stable activity also seen in an automotive industry hit by recent wobbles as it posted quarterly core earnings just ahead of forecast.
Worries over slowing global growth has hit the industrial stocks in recent months in the wake of weakening purchasing managers indices and slowing car sales in China amid its lingering trade dispute with the United States.
A fall in European auto registrations linked to tougher new emissions tests also has proved deeper than expected with many carmakers such as Daimler and BMW recently issuing profit warnings.
“Underlying customer activity intensified in all three major geographical regions and improved in all customer segments barring automotive and mining which remained stable,” Sandvik said in a statement.
Automotive is an important end-market for Sandvik, accounting for about 13 percent of group sales. With most these sales generated at its high-margin Machining Solutions unit, the sector is even more important from a profit perspective.
Sandvik’s Swedish industrial peer Atlas Copco on Friday reported weaker than expected earnings, and forecast a drop in fourth-quarter demand, driven by the automotive industry and the semiconductor industry.
Third-quarter adjusted operating earnings at the maker of metal-cutting tools and mining gear rose to 4.59 billion crowns ($510 million) from 3.34 billion crowns a year ago, beating a 4.52 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 the 24.6 billion crown mean poll forecast.
Sandvik shares were up 0.5 percent at 1022 GMT, compared with a 3.9 percent drop ahead of the results. Its shares down 14 percent over the past month, in line with the fall in the European industrials index. ($1 = 9.0044 Swedish crowns) (Reporting by Johannes Hellstrom; editing by Niklas Pollard)