SKF reports second-quarter earnings above market expectations (updated)
18/07/2025 06:55
Adds share move in paragraph 3, CEO comment in paragraph 7, 9, 12, context in paragraph 11
By Anna Chaberska and Vera Dvorakova
July 18 - Swedish industrial bearings maker SKF SKFb.ST reported second-quarter earnings that were above market estimates and confirmed plans for layoffs to offset dampened demand and tariff uncertainty.
The world's biggest maker of industrial bearings has been cutting its product portfolio, exiting less profitable segments, raising prices and relocating production.
SKF shares were up 4.7% at 0812 GMT.
It reported an adjusted operating profit of SEK 3.09 billion ($317.71 million)for the second quarter on Friday, above the average forecast of 2.72 billion crowns from analysts polled by LSEG.
Chief Executive Rickard Gustafson said in a statement that higher prices and cost cutting had offset lower sales volumes.
He cited 1,700 job cuts, primarily in Europe. SKF expects around 2 billion crowns of full annual savings to be achieved in 2027.
The savings are expected to "more than offset" the costs of the automotive unit separation, Gustafson said in an analyst call. The engineering group announced in 2024 its plan to spin off its automotive unit and list it on Nasdaq Stockholm. Most recently, SKF sold its aerospeace business in October.
SKF has largely offset increased tariff costs and expects to do so again in the third quarter, its CEO said.
Gustafson added that SKF expects the majority of the net tariff impact in the automotive business. However, the U.S. conditions have mostly stabilized and now seem back to how they were before Liberation Day, he told Reuters in an interview.
European companies are struggling with an uncertain macroeconomic environment and falling demand as the global trade war escalates and the EU considers retaliatory tariffs.
SKF, who makes bearings for a vast range of industries and products, has also been facing a slump in demand.
"I would say it's bottoming out, especially in Europe. It's not deteriorating further, but it's definitely not improving," Gustafson told Reuters.
($1 = 9.7257 Swedish crowns)
(Reporting by Vera Dvorakova and Anna Chaberska; Editing by Matt Scuffham)
((Anna.chaberska@thomsonreuters.com; vera.dvorakova@thomsonreuters.com))