Swedish bearing company AB SKF (OMX: SKF B) gave the first glimbse into large engineering company reports for second quarter of 2011 when it released its half-year interim report on Friday. President and CEO Tom Johnstone said that demand was in line with expectations, helping the company to reach record operating profit and good cash flow.
Net sales were up 6,4% in Swedish kronor to 16 712 million and operating margin was 15.7%, which is also a new record for SKF. The group’s advance was stable across all geographical areas; Europe, North American, Asia and the Middle East and Africa all showed double digit growth.
SKF expects third quarter demand this year to be significantly higher or higher across all divisions than in 2010. Demand in Automotive Division is expected to grow slower than in Industrial Division. CEO Johnstone feels that despite increased uncertainty and some normal seasonal factors in Q3 the company will continue to invest and raise prices as necessary as a reaction to high raw material costs and currency headwinds.
Markets weren’t as overjoyed and SKF’s share backed down little more than 3% on Friday since analyst houses were expecting even stronger numbers.
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