Record earnings from Trelleborg, some concern with outlook

While Trelleborgs (OMX: TREL B) comparable sales fell by 2% and even taking acquisitions into account, just marginally topped Q2 of last year at 5.66 billion SEK, the polymer technology focused engineering group made record profit behind increasing margins. The 712 million net profit translates into an EPS of 2.60 SEK. Free cash flow of 646 million is also a good thing with plenty of investments still ongoing. Investors have rewarded the company with a 7% gain going into final hour of trading.

Trelleborg also spoke of favourable developments in North America and mostly in Asia but a more mixed picture in Europe. Europe was to blame for the sales decline. Trelleborg is investing heavily in Brazil, India and China to be a truly global player. TrelleborgVibracoustic, the staggeringly named joint venture with Freudenberg on antivibration solutions for light and heavy vehicles is now operational. The company is closely following market developments and currently expects somewhat lower demand on Q3 adjusted for seasonal variations vs. Q2.