By Sven Grundberg
STOCKHOLM--Swedish ball bearing maker SKF AB (SKF-B.SK)
Wednesday said a weaker market development in Western Europe and
Asia has prompted it to cut its second-quarter demand forecast and
introduce cost saving measures.
The company, which is regarded as one of the most cyclical
companies in the Nordics, said it expects demand for its products
in the second quarter to fall slightly compared with the same
quarter last year.
The company previously said demand for its products would be
slightly higher year-on-year in the second quarter.
SKF added that demand in the second quarter would be in line
with the level seen in the first quarter, having previously said it
expects second quarter demand to be slightly higher
sequentially.
"We are seeing a weaker development in our sales in Western
Europe and Asia than we expected entering the quarter. In Europe,
it is quite broad-based," Tom Johnstone, SKF's chief executive said
in a statement.
Mr. Johnstone added that the weaker demand probably "reflects
what is happening in the financial markets and a general lack of
confidence."
As a result of weaker demand, SKF said it has taken steps to
reduce its cost base in Germany, by introducing voluntary early
retirement and redundancy schemes.
SKF expects to cut 400 jobs in Germany and added that the
measures will lead to annual savings of around 170 million Swedish
kronor ($24.06 million) by 2016.
At 0743 shares in SKF traded 7% lower at SEK133.70. SKF's
announcement also dragged down share prices for other cyclical
Swedish industrials such as Atlas Copco AB (ATCO-A.SK) and Sandvik
AB (SAND.SK), which traded down 3% and 4.6% respectively.
Write to Sven Grundberg at sven.grundberg@dowjones.com