SKF Sees Unchanged Demand as Profit Beats Estimates

SKF AB, the world’s biggest maker of bearings, will cut 1,500 jobs as Chief Executive Officer Alrik Danielson extends a savings drive to counter stagnant markets.

 

SKF is looking to shave an additional 1.2 billion kronor ($146 million) from costs as it merges two industrial units and eliminates administrative jobs and headcount at an automotive operation, the company said today. Getting the extra savings will cost about 1.4 billion kronor.

 

With orders predicted to be little changed in Europe, North America and Latin America this quarter, Danielson is adding to an existing 3 billion-krona savings program. The Gothenburg-based company still sees Asian markets growing.

 

“The changes in the industrial business were the logical step forward and it’s being implemented,” Danielson said on a call.

SKF’s bearings, seals and lubricants are used to reduce friction in everything from skateboards to escalators and aircraft, and the company’s results and forecasts are a barometer for the health of global manufacturing.

 

The efficiency drive helped fourth-quarter earnings beat estimates. Operating profit excluding one-time costs rose 15 percent to 2.08 billion kronor, compared with an average analyst estimate of 2.05 billion kroner.

 

The dollar’s gains on currency markets and slackening demand in some emerging markets have held back manufacturing growth in the U.S., where business-equipment orders fell for a fourth month in December.

 

SKF rose to 190.90 kronor and was trading up 2.3 percent as of 1:26 p.m. in Stockholm. The shares have gained 7.4 percent in the past 12 months.