Atlas Copco lifts demand forecast despite a profit drop

Swedish industrial group Atlas Copco on Friday raised its near-term demand forecast, even as it reported a drop in second-quarter profit and revenue, citing negative currency effects.

The company said it now expects customer activity to remain at its current level, an upgrade from its previous forecast that activity would weaken somewhat.

Order intake for the quarter fell 8% to 40.1 billion Swedish kronor from 43.7 billion kronor a year earlier, which the company attributed to a 9% negative impact from currency movements.

Revenue for the three months ended June 30 decreased 8% to 41.2 billion kronor, while operating profit fell to 8.5 billion kronor from 9.5 billion kronor in the same period last year.

The operating profit margin narrowed to 20.6% from 21.1% a year ago, according to the company.

“The macroeconomic environment has remained uncertain throughout the quarter,” said Chief Executive Vagner Rego.

“Despite this, the overall demand for Atlas Copco Group’s products and services remained relatively stable compared to the previous year.”

Mr. Rego added that demand for services, including its specialty rental business, grew with increased order volumes in all regions.

The results follow a period of acquisitions for the Stockholm-based company, which recently announced deals to expand its compressor and semiconductor-related businesses.