Schaeffler's second quarter profit falls almost 30% (updated)

Schaeffler AG

06/08/2024 09:26

(Rewrites to focus on profit, adds analyst comment)
    By Louis van Boxel-Woolf
       Aug 6 (Reuters) - German machine and car parts maker
Schaeffler AG  SHA_p.DE  reported on Tuesday an almost 30% drop
in second quarter core profit, hit by a slump in earnings in its
bearings and industrial solutions division, particularly in
Europe and China.
    Earnings in the industrial solutions business slid 67.7%
from a year earlier, dragging down group-wide earnings before
interest, taxes and special items, which fell 29.4% from a year
earlier to 204 million euros ($223.07 million) for the quarter.
    Schaeffler has been hit by a slowdown in manufacturing
globally and said it saw weaker demand from industry in Europe
in the second quarter and increased competition in China for
bearings for wind turbines.
    Europe is Schaeffler's biggest market, accounting for about
45% of its sales last year.  
    Pressure on both volume and price appeared to be more
persistent in the second quarter than Schaeffler had expected,
said Pal Skirta, an analyst at Metzler.
    "This is consistent with weak Q2 GDP figures from China,
poor industrial order intake in Germany, and recessionary
indicators in the U.S.," he said.
    Though Schaeffler said second quarter revenue for the group
as a whole rose by 4.2% in constant currencies to 4.2 billion
euros, margins at the bearings and industrial solutions
division, which fell from 7.4% to 2.5%, were affected by both
volumes and sales prices.
    Revenue at the division fell 4.5%. 
    Schaeffler, which is merging with Bavarian drivetrain maker
Vitesco Technologies  VTSCn.DE , had cut its guidance for the
new combined entity in July after Vitesco had lowered its own
guidance, warning of weak demand from carmakers.

($1 = 0.9145 euros)

 (Reporting by Louis van Boxel-Woolf; Editing by Susan Fenton)
 ((Louis.vanBoxel-Woolf@thomsonreuters.com;))