Atlas Copco Second-quarter Revenues Drop 14 Percent

Atlas Copco last week reported that revenues in the second quarter of 2009 fell 14 percent to SEK 16.16 billion (about U.S. $2.07 billion) from SEK 18.88 billion (U.S. $2.42 billion) a year ago, an organic decline of 27 percent. Organic order intake dropped 37 percent. Operating profit was SEK 2.07 billion (U.S. $264.9 million) from SEK 3.63 billion (U.S. $465.5 million), corresponding to a margin of 12.8 percent. Adjusted for restructuring costs, the margin was 14.4 percent.

Global demand for Atlas Copco’s products remained on a low level in the second quarter, and the Group continued implementing restructuring measures to adapt capacity and costs and increase efficiency. Revenues and earnings fell from a year earlier. Profitability was in line with the first quarter and the cash flow was strong.

“We have achieved a strong result in light of the tough demand situation, and we will continue optimizing our manufacturing structure,” said Ronnie Leten, president and CEO of the Atlas Copco Group. “We expect demand to remain weak in most industries and regions, and stay around the current level in the near term.”

During the quarter, the number of employees was reduced by about 1,600, giving a total reduction of the workforce since September 2008 of 5,440, which will save more than SEK 2.0 billion (U.S. $256.5 million) annually, the company said.

“While the Group is undertaking many efforts to reduce costs, we always have the long-term view in mind,” Leten said. “We are continuing to invest in product development, services and in market presence. The future of Atlas Copco depends on our ability to continue to deliver excellent service and improve the productivity and energy efficiency for our customers. The introduction of the Carbon Zero compressors at the end of the second quarter demonstrates our strength in this area.”

Profit for the period was SEK 1.47 billion (U.S. $188.2 million), a 40-percent decline from SEK 2.46 billion (U.S. $315.8 million) a year ago. Basic and diluted earnings per share were SEK 1.20 (U.S. $0.15) from SEK 2.01 (U.S. $0.26) in the year-ago quarter.

Last month, Atlas Copco introduced Carbon Zero, a range of compressors that have been certified by the German TÜV institute as being able to recover 100 percent of the electrical input power for heating water.

In the near-term demand is expected to remain weak in most industries and regions and stay around the current level.

Headquartered in Stockholm, Sweden, Atlas Copco is an international 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.

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