STOCKHOLM (Reuters)-SKF, the world's largest manufacturer of industrial bearings, on Tuesday predicted further growth in sales in the third quarter. Earnings previously announced were slightly higher than expected, despite the negative currency impact and rising costs.
SKF reported that with the help of a strong recovery in demand from the automotive industry, its organic net sales in the second quarter soared by a third compared to the coronavirus pandemic a year ago. Its automotive business accounted for about 30% of total sales, an increase of 75.9%, while sales in the industrial sector, which accounted for 70% of sales, increased by 21.7%.
The Swedish company, which competes with German Schaeffler, said it expects organic growth of approximately 10% in the third quarter compared to the same period last year.
SKF reported an operating profit of SEK 2.88 billion (US$331.3 million) in the second quarter, higher than the 2.81 billion expected in the Refinitiv survey and much higher than the 669 million reported in the same period last year.
Investment bank Jefferies said in a report: "This is the industry's strongest EBIT so far this quarter," and pointed out that the adjusted operating margin of the industrial sector has increased from 14% in the same period last year to 18%. .
SKF stock price has not changed this year as of Monday, up 2.5% at 0703 GMT.
However, CEO Ricard Gustafson, who took over last month, warned that supply chain pressure will continue to "become a theme" in the third quarter.
"As we all know, the epidemic is far from over. We are still working to solve this problem... The supply situation is still a challenge, but we do believe that demand growth will continue," he told analysts and reporters.
SKF said in April that the global semiconductor shortage that has forced global automakers to reduce production in recent months may have a "minor impact" in the second quarter.
Reporting by Helena Soderpam; editing by Niklas Pollard, Shailesh Kuber, and Tomasz Janowski
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