SKF report poorer than expected results - shares diveThursday, 26 January 2012
Engineering company, SKF is the first among the major manufacturing companies to report its performance in the fourth quarter, which turn out to be a profit but that which is lower than analysts' has expected.
As expected, the market reacted sharply with a sell, sell, sell or its share - and its value fell sharply after the report was released at lunchtime on Thursday.
AdvertisementAnalysts had expected a turnover of Skr16.261 billion and an operating profit of Skr2.189 billion. But expectations were dashed as SKF had a turnover instead of Skr16.257 billion in the fourth quarter of 2010 and operating income of Skr 2.006 billion.
Profit after tax was Skr1205 million, which was also, lower than expected. The forecast for net profit stood at Skr1368 million, according to analysts expectation.
CEO Tom Johnstone is pleased with the record figures for the year 2011 in terms of sales, operating income and operating margin. But SKF boss flags for an uncertain market future.
"When we look into the first quarter, we still see uncertainty in demand in Europe and in our business in the automotive segment. Basically, the demand for the group will be lower than in the first quarter last year and in line with the fourth quarter, "writes Tom Johnstone in the company's report.
The production "will be significantly lower year on year and relatively unchanged from the fourth quarter, "writes SKF in the report.
SKF's sales rose by 2.8 percent. In Europe, low growth of 0.5 percent in North America at 5.6 percent and in Latin America at 11 percent. In Asia, growth remained at 0.8 percent while sales in the Middle East and Asia rose by 19.9 percent.
The Company's Board of Directors proposes that the dividend be increased by 10 percent to Skr 5.50 per share. Here the market is expected Skr 5.90 in dividends.
Manufacturing level will be relatively unchanged during the first quarter, compared with the fourth quarter of last year.
By Scancomark.se Team
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