More was expected of Sandvik

Engineering sector barometer Sandvik (OMX: SAND) reported Q1 2013 earnings this morning. The Swedish behemoth painted a mixed picture with slight improvement over most of the sectors compared to the end of last year. Development was best in oil&gas and construction. Mining segment however was under pressure as weak demand and furthering uncertainty in the industry led to a lower activity. Its 30% lower order intake vs. last year’s Q1 was the main culprit for an 18% dip in the company orders. The 22.3 SEK billion in intakes is slightly above quarterly invoiced sales, which in turn were 5% below Q1 2012m at 22.1 billion.

If only this was the whole story but obviously profit numbers came in proportionally even weaker. Operating profit fell a third to 2.5 billion and reported profit for the period came in under 1.5 billion. The company sees strong Swedish krona as a major reason for the weak development overall. Cash flow fared better as the company continues to manage inventories and man hours. Analysts following the company were way off making this a major miss.