SKF Profit Misses Estimates on Sluggish Demand in China, Europe
2015-07-15 06:54:56.892 GMT
By Niclas Rolander
(Bloomberg) -- SKF AB, the world’s biggest maker of
bearings, posted second-quarter earnings that missed analyst
estimates amid sluggish orders from China and Europe, and said
demand will decline in the current quarter.
Adjusted operating profit was 2.58 billion kronor ($304
million), missing the 2.7 billion-kronor average estimate of
analysts in a Bloomberg survey.
“During the first-half year we saw a weak development of
the global industrial production,” Chief Executive Officer
Alrik Danielson said in a statement Wednesday. “Lately the
uncertainty regarding the market demand in China has increased
further. Entering the third quarter, we all in all experience a
relatively weak industrial production.”
Gothenburg, Sweden-based SKF, whose bearings, seals and
lubricants are used to reduce friction in everything from
skateboards to mining gear and aircraft, seeks to counter
sluggish demand by cutting 1,500 jobs. The savings effort,
launched by Danielson shortly after he took over as CEO at the
start of this year, seeks to cut annual costs by 1.2 billion
kronor.
SKF predicts demand will be slightly lower in the current
quarter compared with the previous three months. Demand in
Europe is expected to be “lower” while it will remain stagnant
in all other regions, the company said.
The company is also working to improve productivity and
competitiveness of its automotive unit, which has lagged behind
SKF’s industrial business, through simplifying the structure of
the division. The automotive division’s profit margin was 3.8
percent in the first six months, highlighting the challenge for
the company to reach its target and increase the total margin to
15 percent.
Second-quarter sales increased 11 percent to 20 billion
kronor, as both revenue and profit were boosted by the effects
of a weaker Swedish krona. Without those currency effects,
revenue was 1.5 percent lower than a year ago.
For Related News and Information:
Emerging Stocks Fall as China Data Fail to Boost Confidence
Top Stories:TOP<GO>
To contact the reporter on this story:
Niclas Rolander in Stockholm at +46-8-610-0712 or
nrolander@bloomberg.net
To contact the editors responsible for this story:
Simon Thiel at +44-20-3525-2814 or
sthiel1@bloomberg.net
Andrew Noël
2015-07-15 06:54:56.892 GMT
By Niclas Rolander
(Bloomberg) -- SKF AB, the world’s biggest maker of
bearings, posted second-quarter earnings that missed analyst
estimates amid sluggish orders from China and Europe, and said
demand will decline in the current quarter.
Adjusted operating profit was 2.58 billion kronor ($304
million), missing the 2.7 billion-kronor average estimate of
analysts in a Bloomberg survey.
“During the first-half year we saw a weak development of
the global industrial production,” Chief Executive Officer
Alrik Danielson said in a statement Wednesday. “Lately the
uncertainty regarding the market demand in China has increased
further. Entering the third quarter, we all in all experience a
relatively weak industrial production.”
Gothenburg, Sweden-based SKF, whose bearings, seals and
lubricants are used to reduce friction in everything from
skateboards to mining gear and aircraft, seeks to counter
sluggish demand by cutting 1,500 jobs. The savings effort,
launched by Danielson shortly after he took over as CEO at the
start of this year, seeks to cut annual costs by 1.2 billion
kronor.
SKF predicts demand will be slightly lower in the current
quarter compared with the previous three months. Demand in
Europe is expected to be “lower” while it will remain stagnant
in all other regions, the company said.
The company is also working to improve productivity and
competitiveness of its automotive unit, which has lagged behind
SKF’s industrial business, through simplifying the structure of
the division. The automotive division’s profit margin was 3.8
percent in the first six months, highlighting the challenge for
the company to reach its target and increase the total margin to
15 percent.
Second-quarter sales increased 11 percent to 20 billion
kronor, as both revenue and profit were boosted by the effects
of a weaker Swedish krona. Without those currency effects,
revenue was 1.5 percent lower than a year ago.
For Related News and Information:
Emerging Stocks Fall as China Data Fail to Boost Confidence
Top Stories:TOP<GO>
To contact the reporter on this story:
Niclas Rolander in Stockholm at +46-8-610-0712 or
nrolander@bloomberg.net
To contact the editors responsible for this story:
Simon Thiel at +44-20-3525-2814 or
sthiel1@bloomberg.net
Andrew Noël