March 6, 2019 / 8:02 AM / 20 days ago

Bearings maker Schaeffler to restructure as 2018 operating profit tumbles

FRANKFURT, March 6 (Reuters) - German bearings maker Schaeffler announced a restructuring program and warned of challenging autos market ahead as its earnings slumped, weighing on its shares in pre-market trading.

Schaeffler, which was dropped out of the German midcap index on Tuesday, was expected to open down 4 percent on Wednesday.

Schaeffler said its 2018 adjusted earnings before interest and taxes fell 13 percent to 1.38 billion euros, while revenue rose 3.9 percent.

Schaeffler said it expects revenue to grow by 1-3 percent in 2019 and an EBIT margin before special items of 8-9 percent.

“We are anticipating that the environment, especially in the global automotive business, will remain extremely demanding and challenging. At the same time, we expect the global economy to slow down further,” Chief Executive Klaus Rosenfeld said.

He said the company would cut 900 jobs as part of its restructuring program RACE, which aims at improving earnings by approximately 90 million euros, or the EBIT margin by 100 basis points, in its initial phase.

Schaeffler said it would keep its dividend stable at 55 cents a share.

Reporting by Arno Schuetze; editing by Jason Neely

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