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* EBIT Q1 488 million SEK vs consensus 1.01 billion
* EBIT Business Development Unit SEK 84 million vs. 860 million
* CEO: business development unit completed as planned
* Less than expected building unit profits
* Shares down 4 pct (adds CEO, detail, background, badyst)
STOCKHOLM, April 26 (Reuters) – Swedish automaker Skanska on Friday announced an unexpected drop in operating profit in the first quarter, as profits from its commercial development business plummeted, leading to a fall in equities.
The operating profit of the main builder in the Nordic region was 488 million kronor ($ 51.2 million), compared to an average forecast of 1.01 billion badysts.
A year earlier, Skanska – which is also one of the largest builders in the United States – posted a profit of 652 million crowns.
The operating profit of the commercial real estate development division fell from 860 million euros to 84 million euros, against a forecast of 484 million badysts.
CEO Anders Danielsson, however, told Reuters that the unit had worked as expected and that the divestments made during the quarter had generated good margins. The interest of tenants and investors in all markets remained strong, he said in an interview.
Skanska's commercial and residential real estate development operations have grown rapidly in recent years and account for more than three-quarters of profits. Real estate development carries a higher risk for the builder, but offers higher profits than construction work ordered by a client.
"The division of commercial property is the one that is clearly worse (than expected) but it is very volatile and I think it will resume in 2019," said Albin Sandberg, an badyst with Kepler Cheuvreux.
"The building margins are not big but no disaster either," he said.
However, stocks fell on news of 4.4% at 07:04 GMT, their lowest level in six weeks.
The profits of the construction unit, which accounts for most of the group's revenues and is currently being restructured, have progressed less than expected.
Danielsson said Skanska still has a generally positive market outlook. "However, the political and macroeconomic uncertainties make it difficult to predict the duration of these relatively favorable market conditions," he added.
Skanska slightly lowered its outlook for the Swedish non-residential construction market and maintained its forecast for the other 12 months. ($ 1 = 9.5304 Swedish kroner) (Anna Ringstrom report, additional report by Anna Ringstrom, edited by Niklas Pollard)
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