SKF AB (SKFB), the world’s biggest maker of bearings, fell the most in four months in Stockholm trading after reporting third-quarter profit that missed analysts’ estimates.
Shares of SKF fell as much as 4.3 percent, the most since June 24, and traded 3.8 percent lower at 173.6 kronor as of 1 p.m. local time. Net income fell to 1.12 billion kronor ($180 million) from 1.25 billion kronor, the company said today. Analysts estimated profit of 1.22 billion kronor. Revenue was little changed at 15.6 billion kronor.
SKF said demand among industrial clients fell short of its expectations, with no immediate market recovery in sight. The manufacturer is targeting 3 billion-kronor in spending cuts through 2015, including eliminating 2,500 jobs. The company, which employs about 46,000 people, is moving production away from western Europe to regions with faster-growing markets, such as Asia and Latin America.
“We see some lack of traction in a number of other industrial markets - not getting worse but not getting better yet either,” Chief Executive Officer Tom Johnstone said in the statement. “The automotive business benefited from an improved demand and better mix of sales.”
The manufacturer is considered a barometer for the health of global industrial orders because its products are used in construction, carmaking and aerospace manufacturing.
SKF’s bid to buy Ann Arbor, Michigan-based competitor Kaydon Corp. (KDN) prompted Moody’s Investors Service to say in September that it may cut the Swedish manufacturer’s credit rating should the takeover fail to help profitability. Standard & Poor’s reiterated its negative watch on SKF debt that month because of the possible effects of the bid on cash.
The Swedish company’s debt is rated A3 at Moody’s and A- at S&P, the fourth-lowest investment grades at both credit-reporting companies.
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