By Niklas Pollard
STOCKHOLM (Reuters) -Swedish maker of metal-cutting tools and mining gear Sandvik reported core earnings that beat analysts' expectations on Monday and said strong demand had lifted order bookings in the third quarter.
The company, among the first major Nordic industrial companies to report its third-quarter numbers, said adjusted operating profit grew to 5.52 billion Swedish crowns ($489.97 million) from a year-earlier 4.25 billion.
The mean forecast in a Refinitiv poll of analysts was for a profit of 5.02 billion.
Stocks across the European engineering industry have slumped this year in the wake of Russia's invasion of Ukraine amid soaring cost inflation, energy worries and stretched supply chains, even as demand has remained strong.
Sandvik, which competes with Epiroc and Kennametal, said like-for-like order intake was up 8% in the quarter at 29.2 billion crowns on gains in its mining and machining solutions businesses.
Chief Executive Stefan Widing said Sandvik's price hikes had not fully offset the impact of cost inflation, though it had made "good progress" in the quarter.
"We also see the supply chain continuing to ease a little bit, and we expect that to continue," Widing told a news conference.
Shares in Sandvik, which have lost roughly a third of their value in the year to date, rose 3.4% around midday.
Sandvik, which provides a reliable gauge of industrial demand due to its broad customer base, was one of the first industrial companies to reports its earnings and said it had seen "strong broad-based demand" for its products.
"As we leave this strong quarter behind us, there continue to be uncertainties ahead," Widing said in a statement. "Leading indicators show signs of an upcoming downturn in some market segments, but the timing and scope is difficult to predict at this stage."
Sales at the company rose 35% to 29.2 billion crowns, buoyed by currency swings where the Swedish crown has been hard hit by volatility in foreign exchange markets. On a like-for-like basis, sales still rose 13%.
($1 = 11.2659 Swedish crowns)