Sandvik, the Swedish engineering group with a big UK interest, saw its share price fall sharply yesterday after its latest quarterly pre-tax profits disappointed investors.
The company, which employs about 1,400 people at Halesowen, said it had been affected by an unexpected £45.3 million writedown of its metal stocks because of falling nickel prices. Fourth quarter earnings tumbled 13 per cent to £215 million compared with market expectations of £246 million.
Sales for the period rose by 17 per cent to £1.79 billion, which was slightly ahead of market forecasts.
Sandvik, the world's biggest manufacturer of metal-cutting equipment, said lower prices for nickel, a key raw material for the group, would also have a bearing on its results in 2008.
Full year pre-tax profits for 2007 rose by 17 per cent to just over £1 billion, Sandvik said.
Sweden's blue-chip industrial firms have seen years of strong demand for engineered goods lift earnings to record levels. But the recent credit crisis has raised fears that last year may have been the high water-mark.
So far, however, the gloom has not dented Sandvik's business.
"Up to now we have not seen any signs of weakening demand in the market," chief executive Lars Pettersson said.
"We built up a substantial order book further in the fourth quarter and we have not received any signals from our customers so far that they have a different opinion about the future."