Sandvik Q1 profit beats forecasts as tool orders rise
Sandvik reported a 6% rise in first quarter core profit to 6.14 billion crowns. Tool orders grew in early April despite an uncertain geopolitical environment.
SANDVIK AB reported a first-quarter core profit that exceeded market expectations on Wednesday, despite operating in what management described as a highly uncertain geopolitical environment. The industrial manufacturer, headquartered in Sweden, saw its operating profit before amortisation and items affecting comparability rise by 6% to 6.14 billion crowns ($671 million). This result outperformed the 5.97 billion crowns anticipated by analysts in an LSEG poll.
The company, which produces metal-cutting tools and mining equipment, recorded organic sales growth of 15% during the January-March period. Sandvik is widely regarded as an economic bellwether due to its diverse customer base and relatively short lead times. Management noted that order intake for its cutting tools in the first half of April was higher than the average seen in the first quarter.
"The geopolitical and macro-environment continues to be highly uncertain," CEO Stefan Widing said in a statement.
Market dynamics regarding tungsten have introduced additional volatility into the daily order intake trends. The price of tungsten, a critical industrial metal used for its hardness, has surged due to tightening global inventories and industrial demand, alongside export controls from China. Sandvik, which maintains its own tungsten mine, reported a significant jump in demand for its tungsten powder.
Shares of the company remained largely flat following the report, though they have gained 30% since the start of the year. The financial results were reported against a backdrop where $1 equals 9.1512 Swedish crowns, impacting USD/SEK related valuations.
