STOCKHOLM (Reuters) – Swedish engineering group Sandvik <SAND.ST> reported quarterly operating earnings below market expectations on Wednesday and said it would cut around 2,000 jobs to buttress profitability in the face of early signs of slowing market demand.
Sandvik said it had seen weaker demand in its parts of its business, primarily from customers in the automotive and general engineering sectors, towards the end of the second quarter.
“We will take further action in all business areas to deliver strong margins long-term,” Sandvik CEO Bjorn Rosengren said in a statement. “These activities will be promptly implemented and include a personnel reduction of approximately 2,000.”
Operating earnings at the maker of metal-cutting tools and mining gear maker edged up to 5.08 billion Swedish crowns (£436.32 million) from 5.04 billion in the year-ago quarter, but came in below the 5.18 billion mean forecast in a poll of analysts based on Refinitiv data.
Sandvik said the results had also been boosted to the tune of 110 million crowns due to an adjustment of the purchase price of a previously announced sale of one of its smaller businesses.
The company’s order bookings fell 5% on a like-for-like basis, compared with the 6% growth reported for the first quarter of the year.
Sandvik shares were down 3.4% following the results.
(Reporting by Johannes Hellstrom; editing by Niklas Pollard)