SKF Reports Higher Net Profit

STOCKHOLM--Sweden's SKF AB (SKF-B.SK) Tuesday said it expects overall demand for its products and services to stay flat in the third quarter as it reported a 7.4% jump in second quarter net profit driven by higher sales.

SKF, the world's biggest maker of ball bearings and a bellwether for the short-cycle engineering sector, said net profit rose to 1.16 billion Swedish kronor in the second quarter from 1.08 billion kronor a year earlier, undershooting a 1.25 billion kronor average forecast by analysts polled by FactSet.

"Looking forward and taking account of the continued uncertainty in the global market place we expect that in the third quarter overall demand for our products and services will stay on the same level," Chief Executive Tom Johnstone said in a statement.

SKF, a global supplier to the automotive and energy sectors, said steps to improve its price mix had positive results in the second quarter.

The Gothenburg-based company, which generates nearly half of its sales in Europe and a quarter in Asia, said European demand for its products and services is expected to be relatively unchanged in the third quarter compared to the second quarter. Demand is forecast to be slightly higher in North America and Asia, but slightly lower in Latin America, SKF said.

Manufacturing is expected to be slightly higher year over year and relatively unchanged compared to the second quarter.

SKF's ball bearings are used to reduce rotational friction in parts in cars, industrial machinery and turbines.

Sales in the second quarter totaled 17.96 billion kronor -- in line with analysts' forecasts -- but up from 16.39 billion kronor in the year earlier. Operating profit rose to 2.1 billion kronor, from 1.84 billion kronor.

The results include one-time charges of 220 million kronor stemming from a previously announced cost cutting program and changes in currency rates and regulations in Venezuela.

-Write to Anna Molin at [e-mail]; Twitter: @AnnaWSJ

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