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Profit fall for bearing company SKF

Wednesday, 17 October 2012
Bearing company, SKF's profits and sales shrank in the third quarter. Earnings collapse was milder but sales decline worse than expected and the company's CEO, Tom Johnstone, traces declining demand in the future.

"The macro economic development and increasing uncertainty which was evident during the last few months has clearly influenced our business. Our sales weakened as we went through the quarter and this was mainly seen in many of our industrial markets as well as in the European and particularly in the Asian region," writes bearings giant CEO Tom Johnstone in the report.

Sales in Europe fell by 7 per cent and in Asia by 11 percent. In North and Latin America, however, grew sales by 5 percent and 8 percent in the quarter, compared with a year earlier.

During the fourth quarter, demand will fold compared to the just-completed third, deep groove ball bearing giant's CEO Tom Johnstone.

"The demand for SKF's products and services is expected to be slightly lower for the group, for all business areas as well as in Europe, Asia and North America. In Latin America, demand is expected to be relatively unchanged, "he writes in the report.

SKF's net profit sank to 1.266 billion kronor for the third quarter. That compares with profit of Skr1,603 million a year earlier.

Earnings were slightly better than expected. Analysts had expected Skr1,251 million.
Sales fell to Skr15,486 million, compared to Skr16,545 million a year earlier. It was worse than expected Skr16,329 million.
By Scancomark.com Team

The numbers
Key figures 
Q3 2012 Q3 2011
YTD 2012
YTD 2011
Net sales, SEKm
15,486
16,545
49,591 49,959
Operating profit, SEKm
1,913 
2,479 6,106
7,606
Operating margin, %
12.4 15.0
12.3 15.2
Profit before taxes, SEKm 1,734
2,345 
5,516 7,109
Net profit, SEKm
1,266
1,656
3,867 5,019
Basic earnings per share, SEK 2.71 3.52
  8.22 10.72

Net sales change in SEK, attributable to:
Volume
Price/mix 
Structure
Currency effect
Total
Q3 2012 -5.0% 0.5% 0.8% -2.7% -6.4%
Year to date 2012    -3.0%
1.4%
0.2% 0.6% -0.8%
               


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