January 29, 2019 / 1:00 PM / 4 months ago

UPDATE 1-Sweden's SKF reassures on industrial demand, shares rise

* Q4 organic sales growth at 5 pct vs forecast 3.7 pct

* Growth powered by strong industrials business

* Forecasts unchanged demand in Q1’19 vs Q1’18

* Sees slightly higher demand for industrials business (Adds CEO comment, background, detail, updates shares)

STOCKHOLM, Jan 29 (Reuters) - Sweden’s SKF, the world’s largest industrial bearings maker, forecast unchanged demand in the first quarter, reassuring investors amid growing signs of a global slowdown and sending its shares up 4 percent.

With car sales in China and Europe slipping in recent months and gauges of economic activity in several main markets trending lower, many analysts had feared weakness might have spread out of SKF’s automotive arm and into its far larger industrials unit.

But the company, a rival of Germany’s Schaeffler, reported quarterly organic sales growth of 5 percent, above the 3.7 percent mean analysts’ forecast, fuelled by strong growth in its industrials business.

Organic sales in automotive, however, fell 3.7 percent, with SKF citing a continued impact from new emission test standards in Europe and softening demand for cars and trucks in China.

“Entering the first quarter of 2019, we expect to see relatively unchanged volumes for the group, slightly higher for industrial and lower for automotive,” SKF Chief Executive Alrik Danielson said in a statement.

The Gothenburg-based company derives about 70 percent of group sales from its industrial business and the rest from the automotive unit.

SKF’s fourth-quarter operating profit, boosted by the sale of its Motion Technologies business, rose to 2.90 billion Swedish crowns ($320.39 million) from a year-ago 2.02 billion, in line with a mean forecast of 2.89 billion in a poll of analysts.

SKF shares rose after the report and were up 3.6 percent by 1233 GMT.

($1 = 9.0515 Swedish crowns)

Reporting by Johannes Hellstrom; editing by Niklas Pollard

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