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SKF reports hike in profits after sales boost

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11:06 CEST+02:00
Swedish industrial bearings giant SKF has reported an increase in second-quarter profits on the back of higher sales and production on 2009.

"The very good sales development and higher manufacturing level combined with the cost-cutting reduction activities undertaken resulted in a strong result for the SKF group," group CEO Tom Johnstone said.

He noted this quarter's results were "a record in terms of operating profit and operating margin" for the company.

SKF, which also makes sealants, is an important supplier to many parts of the industrial processing chain and is therefore regarded as an indicator of activity in manufacturing and machine tooling.

The company posted a profit of 1.45 billion kronor ($196 million) for the April-June quarter.

For the same period in 2009, the firm reported profits of 314 million kronor.

Analysts surveyed by Dow Jones Newswires expected a profit of 1.26 billion kronor for the second quarter.

"There was really no letdown in the report. It was a little bit stronger in every facet than expected," Handelsbanken's Peder Frölén told Dow Jones.

The group was positive on its third-quarter outlook, saying it expected "significantly higher" sales than last year.

"All regions and divisions will see good growth even if we expect lower sales to the car industry in Europe," Johnstone said.

Shares in the Gothenburg-based company fell by 2.64 percent to 143.6 kronor at around 0745 GMT, on a Stockholm Stock Exchange down 0.55 percent.

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