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The eBearing News
October 18, 2005
SKF Reports Third Quarter 2005 Results
copyright © 2005 eBearing Inc.
SKF AB (Sweden), the world's largest bearing manufacturer and a key industrial bellwether, reported
third quarter results, once again significantly ahead of estimates.
Sales for the quarter were MSEK 12 billion (USD $1.52 billion), up 7.5% over 2004's
MSEK 11.2 billion ($1.41 billion).
Operating profit reached 12.1% of sales, from 10.6% in 2004,
2005's third quarter Net profit hit SEK 974 million, up almost 34% from SEK 729 million in 2004.
SKF said sales were up due to: higher volumes, 5.1%; favorable currency translation effects, 3.2%;
and more favorable price/product mix, 2.1%. Negatively impacting sales was -2.9% attributable
to restructuring expenses.
The stronger-than-expected results -- including SKF's seventh consecutive quarterly improvement -- surprised
most industrial analysts, but not as many in bearing industry, if eBearing's interviews are any indication.
All said they expected SKF to show strength, but several observers in the bearing industry said the impact
of SKF's ever-widening array of value-added products and services has been widely underestimated.
Overall, SKF said, third quarter sales, calculated in local currencies and compared to
sales in the same quarter last year (excluding the now-divested Ovako Steel operation) were higher in
Europe, significantly higher in North America and Asia and higher in Latin America.
The company said its manufacturing activity level during third quarter remained flat from
second quarter as planned, but that scheduled production did outpace third quarter 2004.
Inventory management also reflecting rising demand; inventory improved to 19.9% of sales at
the end of the quarter, from 20.5% of annual sales a year ago.
For the rolling 12 months, return on capital hit 22.2% from 16.1% in 2004; return on equity
reached 20.5% from 15.6% in 2004.
Going into fourth quarter, SKF intends to continue holding manufacturing activity at its current levels.
However, holding manufacturing steady actually represents an increase, as production
would normally be dialed back in the fourth quarter to reflect seasonality-reduced demand.
SKF indicated fourth quarter sales are expected to remain on a high level in Europe, slightly higher
in North America, significantly higher in Asia, and on a high level in Latin America.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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