SKF Swings to Profit

STOCKHOLM--SKF AB (SKF-B.SK) on Wednesday said it swung to a net profit in fourth quarter, but demand is expected to be relatively unchanged as it enters the first quarter of the new year.

The world's largest ball-bearing manufacturer company said net profit for the three months ending Dec. 31 was 881 million Swedish kronor ($106.7 million), up from a net loss of SEK2.04 billion in the same period last year. Analysts polled by financial information company Six expected a net profit of SEK1.2 billion for the period.

Demand in the first quarter is expected to be slightly higher in Asia, but it will remain flat in Europe, North America and Latin America, it said. SKF expects it to be unchanged in Automotive Market and Specialty Business and slightly higher for Industrial Market.

"Sequentially, we expect the demand to be relatively unchanged for the Group. However, the short-term demand effects of the very low mineral and oil prices as well as the recent currency movements, with a stronger dollar, are difficult to predict," Chief Executive Alrik Danielson said in a statement.

This was the first interim report to be presented by Mr.Danielson, who took over as chief executive from Tom Johnstone on Jan. 1.

SKF said sales in the fourth quarter were SEK18.5 billion, up from SEK16.4 billion the same period a year ago. Operating profit was SEK1.6 billion , up from an operating loss of SEK1.5 billion a year ago.

The board proposes an unchanged dividend of SEK5.50 per share.

At 1211 GMT shares traded up 1.9% at SEK187.40.

Write to Christina Zander at [e-mail]

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