April 30, 2019 / 6:35 AM / 6 months ago

UPDATE 2-Epiroc shares drop as mining gear orders disappoint

* Epiroc Q1 orders at 10.1 bln SEK vs forecast 10.2 bln

* Mining equipment orders 5 pct below forecast, service in line

* Shares drop 3 pct (Adds background, detail, context, analyst comment)

By Johannes Hellstrom

STOCKHOLM, April 30 (Reuters) - Sweden’s Epiroc said on Tuesday it expected current levels of demand to prevail in the near term after it reported lower than expected quarterly mining equipment orders, sending its shares lower.

Epiroc, which competes against Sweden’s Sandvik and Finland’s Metso, said its order intake inched up to 10.06 billion Swedish crowns ($1.06 billion) in the first quarter, just below the 10.17 billion forecast in a poll of analysts.

While the company’s service business developed in line with analysts’ forecasts, orders at its equipment business were 5 percent below expectations.

Sandvik and Metso both reported a better than expected quarterly order intake earlier in April.

Epiroc Chief Executive Per Lindberg said in a statement that while customers continued to be active and relatively confident, uncertainties about wider economic development were lingering, with clients primarily investing in lower risk projects focusing on increased productivity and efficiency.

“We do not see any clear indications that the current market situation will change and expect that the demand will remain at the current level in the near term,” Lindberg said.

Shares of Epiroc, which makes equipment such as drill rigs, loaders and haulers, were down 3.1 percent by 0800 GMT, compared to a 1.7 percent drop for Sandvik and a 0.7 percent decline for Metso.

“This was a decent quarter for Epiroc, but nowhere near the beats we’ve seen this earnings season from European mining equipment peers including Sandvik and Metso,” Barclays said in a research note.

Epiroc’s operating earnings were 1.93 billion crowns, up from 1.52 billion in the same quarter a year earlier and narrowly ahead of the 1.91 billion mean forecast in the poll.

Epiroc’s stock had risen 4 percent since Sandvik reported its earnings on April 18. It is currently up 20 percent year-to-date.

$1 = 9.5151 Swedish crowns Reporting by Johannes Hellstrom; additional reporting by Esha Vaish; Editing by Johan Ahlander and Kirsten Donovan

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