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 email@example.com
(END) Dow Jones Newswires
June 13, 2012 04:10 ET (08:10 GMT)
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