STOCKHOLM (Reuters) - Sweden’s Alfa Laval (ALFA.ST) reported quarterly order intake far above analyst expectations on Monday with its marine division leading a broad upturn that also helped generate forecast-beating core earnings at the engineering group.
The maker of machinery such as heat exchangers, separators and ballast water treatment equipment, is benefiting from a rebound in contracting for tankers as well as upstream oil and gas activity.
It also said it had seen a sharply increased pace of order intake for environmental products.
“Order intake during the second quarter was significantly stronger than earlier expected, with contributions from all three divisions,” CEO Tom Erixon said in a statement while pointing to a 37 percent sequential rise in bookings in its Marine division alone.
The company, the first large Swedish industrial firm to release second-quarter results, reported order intake of 12.06 billion crowns ($1.37 billion), easily beating a mean forecast 10.25 billion in a poll of analysts.
Alfa Laval shares, which were flat ahead of the results, rose 8 percent at 1135 GMT, taking its year-to-date gain to 19 percent. It has outperformed the European industrial sector .SXNP by a wide margin in 2018.
The company said its quarterly adjusted earnings before interest, taxes and amortization (EBITA) rose to 1.70 billion crowns from a year-ago 1.41 billion to come in ahead of the 1.61 billion seen by analysts.
Addressing the impact of the lingering trade dispute between China and the United States, Erixon told a conference call that Alfa Laval did not currently anticipate any big impact from it though the issue remained a concern.
Alfa Laval forecast slightly lower demand for the third quarter due to slower activity in its Marine and Food & Water divisions after a bumper second quarter.
Reporting by Johannes Hellstrom; editing by Niklas Pollard