The company, one of the first European industrials to report year-end results, said adjusted quarterly operating profit rose to 5.07 billion crowns (409 million pounds) from 4.67 billion a year earlier, beating the 4.86 billion mean forecast from a Refinitiv poll of analysts.
"In the fourth quarter, demand remained at a high level in the long-cycle mining and energy businesses, although a significant decrease was reported for our short-cycle businesses," CEO Bjorn Rosengren said in statement.
The group is considered a good gauge of industrial demand due to high shipping volumes of its cutting tools, which have short lead times from order booking to delivery and a wide customer base.
Sandvik said order intake was 25.2 billion crowns, down 6% organically, but just above the 25.1 billion seen by analysts.
The company in October said it would increase planned job cuts to 2,500 in response to a demand slump in early-cycle markets such as the car industry and related suppliers.
It said on Tuesday that profits had been boosted by cost-reduction efforts, while it had also focused on lowering inventories over the quarter.
"Overall solid numbers by Sandvik given the weaker short-cycle volumes and the bigger-than-expected destock," analysts at Citi said in a research note, while highlighting tepid demand in Europe "with weakness now spreading across all key end-markets and geographies".
Sandvik shares were down 2.6% by 0855 GMT, taking their gains over the past 6 months to 22%, versus a 12% rise for the European industrial sector.
The group said order intake in its cutting-tools unit Machining Solutions dropped 10% on an organic basis in the quarter, citing weaker customer activity versus the year-ago period in all three major regions - Europe, North America and Asia.
Rosengren, who is leaving Sandvik at the end of the month to take the helm at robotics firm ABB, said automotive in Germany was a particular weak spot in Europe, while China demand had levelled off and even improved towards the end of the quarter.
(Reporting by Johannes Hellstrom; editing by Niklas Pollard and Kirsten Donovan)