SKF is now optimistic about the second half of 2002, especially in Europe, and will slowly be increasing production. CEO Sune Carlsson said, "I expect the European market to start to grow during the second half, otherwise we would not need to increase manufacturing."

Second quarter external sales dipped to MSEK 2,513 from MSEK 2,546 in 2001, while operating profits were MSEK 430 from MSEK 429 in 2001.

SKF said sales in Europe were down, Asia was flat and North America rose slightly.

Automotive Division achieved its best result in several quarters by posting external sales of MSEK 3,604, up sharply from MSEK 3,568 in 2001 and MSEK 3,457 in the first quarter of this year. Operating profit was at its high, MSEK 197, thanks to a 5.0% operating margin achieved in the quarter. Operating profit in second quarter 2001 had been MSEK 142 on a 3.6% margin.

While sales to North American automotive and light truck manufacturers were up, both industries declined in Europe. Sales of heavy trucks in North America finally edged up, also helping results.

External sales were MSEK 503, from MSEK 514. Net rose to MSEK 112 over MSEK 100 in 2001, again aided by improving margins to 6.3% from 5.5% a year ago.

SKF's recent acquisition of Bulgaria's VMZ fits into this Division. The company also said its factory in Jakarta, Indonesia is being expanded to meet demand for the Asia-Pacific two-wheeler market.

External sales fell to MSEK 3,462 from MSEK 3,469 in 2001. Operating profit rose to 9.4% of sales from 7.7% of sales, taking net to MSEK 362 from MSEK 300.

Again, sales declines were reported in Europe while North America improved slightly and Asia improved strongly.

External sales fell to MSEK 963 from MSEK 1,039 in 2001, while operating margin stayed flat at 3.7%. Operating profit for the quarter was MSEK 61, down from MSEK 65 in 2001.

Overall aerospace industry demand was weaker in the quarter. Ovako Steel managed a MSEK 12 profit, turning it MSEK 3 profitable for the year.