Sweden's Atlas Copco said that weak demand for its mining equipment and large compressors had slumped further in the first quarter.
Atlas, which has long been an investor darling because of its nimble cost structure, strong aftermarket sales and robust cashflow, said orders had fallen furthest for underground mining equipment, in which it is the global market leader.
"We saw strong demand for industrial tools and assembly solutions, while the mining area continued to be challenging," Chief Executive Ronnie Leten said in a statement.
Atlas and its peers in a Nordic cluster of mining gear suppliers, including Sweden's Sandvik, Denmark's FLSmidth and Finland's Metso, have been squeezed by spending cuts among miners in recent years.
Order intake at Atlas rose to 25.5 billion Swedish crowns ($2.97 billion) from a year-ago 22.7 billon, boosted by favourable exchange rates, but fell well short of the 26.4 billion seen in a Reuters poll of analysts.
"The order intake for equipment ... was mixed and, overall, it was weaker than expected," the company said.
Atlas Copco shares were down 7.7 percent by 1222 GMT, heading toward what would be their biggest daily decline in nearly four years, and were the worst performer in the STOXX Europe 600 Industrial Goods & Services Index.
Before the report, the shares were up 37 percent on the year, sharply outpacing the sector.
"This is Atlas Copco. When orders come in like this, this is what happens," Handelsbanken Capital Markets analyst Peder Frolen said, referring to the firm's history of continuously delivering strong results.
The order intake for the mining unit alone lagged analyst forecasts by 8 percent in the quarter while orders at Compressor Technique, its biggest unit, fell short by 5 percent.
Signs mining demand has slowed still further came last week as Metso posted weaker-than-expected earnings and complained of a further slide, though a more upbeat take from Sandvik had lifted Atlas shares on Monday.
Operating earnings at Atlas, whose mining gear includes drill rigs and loaders, rose to 4.5 billion crowns from a year-ago 3.8 billion, lagging a mean forecast of 4.8 billion in a Reuters poll of analysts.
The company said it expected overall demand to rise somewhat in the current quarter.http://www.reuters.com/article/2015/04/28/atlascopco-results-idUSL8N0XP2AN20150428