Atlas Copco achieved profitability in the third quarter, supported by sales of aftermarket products and services, and continued efficiency improvements, despite a decreased demand for equipment in most regions. Revenues in the third quarter decreased 18 percent to SEK 15.01 billion (about U.S. $2.15 billion) from SEK 18.44 billion (U.S. $2.63 billion) a year ago.
“We are pleased to see that our efforts to increase customer focus, strengthen the aftermarket and reduce costs are paying off in these difficult market conditions,” said Ronnie Leten, president and CEO of the Atlas Copco Group. “We have now achieved annual savings of more than MSEK 2 000 (U.S. $285.7 million).”
Operating profit was SEK 2.4 billion (U.S. $343.1 million) from SEK 3.64 billion (U.S. $519.9 million) in the third quarter of 2008, corresponding to a margin of 15.9 percent (19.7 percent a year earlier and 12.8 percent in the second quarter). Demand remained stable on a lower level than the previous year, but some emerging markets noted improved demand during the quarter compared to the beginning of 2009.
“Even with the changes we have done, overall efficiency is not yet at the level we believe it can be,” said Leten. “We have to improve organizational efficiency but at the same time invest in sales and service people. We must make sure we are visiting all potential customers with a constant flow of new products and services.”
Basic and diluted earnings per share in the third quarter were SEK 1.42 (US $0.20) a decline from SEK 1.99 (US $0.28) in the year-ago period.
“Overall demand is expected to stay around the current level,” Leten said. “The demand in some emerging markets, including China and India, is expected to gradually improve.”
Headquartered in Stockholm, Sweden, Atlas Copco is a leading provider of industrial productivity solutions. The products and services range from compressed air and gas equipment, generators, construction and mining equipment, industrial tools and assembly systems, to related aftermarket and rental.