* Ending rundown in own inventories
* Sees Q1 demand at same level as in Q4
* Q4 EBIT 1.23 bln SEK vs forecast 1.39 bln
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, Jan 30 World number one bearings
maker SKF, sensing an end to the slide which helped
cut fourth-quarter earnings by 40 percent, said it planned to
restore some cuts in production and end the rundown in its own
The output increase by the manufacturing bellwether in the
first quarter of 2013 was only the second time in two years it
has flagged a quarterly rise over the previous three months and
appeared to be a nod to stabilising markets.
Last week SKF's U.S. rival Timken forecast a 5
percent fall in sales this year as customers continued to scale
back inventories, but offered some hope for recovery in the
SKF said it expected unchanged sales in the first quarter
from the fourth in all business segments except trucks, where
demand was falling. Better activity was expected for the
aerospace and electrical industry segments.
SKF's fourth quarter operating profit fell to 1.23 billion
crowns ($193 million) from a year-ago 2.01 billion and below the
1.39 billion seen by analysts.
"Everybody knew it was going to be weak," Handelsbanken
Capital Markets analyst Peder Frolen said of the earnings which
he described as poor relative to organic sales growth.
"On the positive side, volumes were decent and a flat
outlook chimes with the market belief that this is the bottom,
which is probably an accurate assumption."
SKF shares rose 0.7 percent by 1225 GMT despite the earnings
shortfall compared with a 0.2 percent decline in the European
"The overall macro environment is difficult to read with
still a lot of uncertainty," the company said.
"However, at this point we expect demand in the first
quarter for the group to continue at the same level as the
fourth quarter, but still lower year over year. We plan to run
our manufacturing broadly in line with sales in the quarter."
Earlier this month SKF unveiled plans to cut 2,500 jobs as
demand faltered, not only in Europe but also in North America
and Asia. It has said activity in December was particularly
weak, underscoring a bleak outlook.
The company has also been facing headwinds from a strong
Swedish currency in recent months and forecast that exchange
rates would dent operating earnings by about 250 million crowns
this year and by 50 million in the first quarter alone.
SKF proposed a dividend of 5.50 crowns per share for 2012,
unchanged from a year ago an in line with expectations.