SKF Sees Unchanged Demand in 2Q as Net Profit Falls

STOCKHOLM--The world's biggest ball-bearing maker, Swedish SKF (SKF-B.SK), said Friday demand for its products and services is expected to be unchanged in the second quarter as it reported lower net profit for the first quarter.

The company said net profit for the three months ended March 31 was 1.17 billion Swedish kronor ($136 million), compared with SEK1.28 billion in the same period last year, as currency tailwinds of SEK450 million only partly offset restructuring charges.

Ball bearings are used to reduce friction in rotating parts in cars, industrial machinery, and turbines. SKF, a global supplier to almost all industries, including the automotive and energy sectors, said demand for its products is expected to be "unchanged" in the second quarter, compared with the previous three months and a year earlier.

Demand for SKF's products and services is seen as unchanged in Europe, higher in Asia and slightly lower in North and Latin America.

SKF is in the midst of a cost-cutting program that targets SEK1.2 billion in full-year savings and is expected to cost a total of 1.4 billion. The company booked SEK535 million of those costs in the first quarter.

Sales in the first quarter totaled SEK19.45 billion, up from SEK16.73 billion in the year-earlier period. Operating profit excluding restructuring costs rose to SEK2.38 billion from SEK1.91 billion.

Shares closed at SEK225.60 Thursday.

Write to Christina Zander at [e-mail]

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