STOCKHOLM, April 21 (Reuters) - Swedish industrial bearings maker SKF reported a smaller-than-expected fall in first-quarter adjusted operating profit on Tuesday and said it expected like-for-like
Bearings maker SKF raises prices after Iran war pushes up fuel costs
SKF Responds to Geopolitical Uncertainty and Rising Costs
By Greta Rosen Fondahn
STOCKHOLM, April 21 (Reuters) - Swedish industrial bearings maker SKF said on Tuesday it was increasing prices after the Iran war pushed up fuel costs, and forecast flat sales in the current quarter.
Market Outlook and Sales Forecast
SKF - a bellwether of the global manufacturing sector with a customer base spanning products from industrial tools and wind turbines to cars - said it expected demand to be roughly unchanged overall in the second quarter from the first quarter.
"However, geopolitical turmoil, including the conflict in the Middle East, amplifies overall uncertainty," CEO Rickard Gustafson said in a statement.
Impact of Middle East Conflict
The Middle East only accounts for about 1% of SKF sales, Gustafson told analysts and media. However, he said his biggest concerns were over how long the conflict would last and what it would do to global demand.
Company Strategy to Offset Rising Costs
Compensate for Fuel Costs
COMPENSATE FOR FUEL COSTS
Gustafson did not say how much it had raised prices or where.
Proactive Measures and Raw Material Concerns
"We try to be proactive, we try to be quick to respond, and we try to find ways to offset the increased costs resulting from higher fuel prices," he said.
He also anticipated higher raw material costs, including for steel, but said these had not trickled down yet.
Financial Performance
SKF's first-quarter operating profit adjusted for items affecting comparability - including costs for its planned automotive business spin-off - fell to 2.95 billion crowns ($323 million) from 3.23 billion a year earlier, against a mean forecast of 2.74 billion in a poll of analysts provided by SKF, on like-for-like sales growth of 2.4%.
Market Reaction
SKF's shares were down 1% at 0840 GMT, with analysts weighing a softer-than-expected outlook against the earnings beat.
($1 = 9.1273 Swedish crowns)
(Reporting by Greta Rosen Fondahn, editing by Anna Ringstrom and Susan Fenton)
