February 1, 2018 / 12:03 PM / 3 months ago

UPDATE 1-Schaeffler cuts profit guidance, shares drop

* Sees 10.5-11.5 pct 2018 margin after 11.3 pct in 2017

* Expects efficiency plan to hit 2018 earnings again

* Shares plunge most in seven months (Adds analyst comment, shares and background)

BERLIN, Feb 1 (Reuters) - German automotive supplier Schaeffler scaled back its profit guidance for this year after posting lower earnings for 2017, sending its shares down as much as 11 percent on Thursday.

Schaeffler, which makes transmission parts and ball bearings for products ranging from tools to airplanes, said it expected an adjusted operating profit (EBIT) margin of 10.5-11.5 percent this year after 11-12 percent last year.

Adjusted EBIT declined 6.8 percent in 2017 from a year earlier to 1.58 billion euros ($1.96 billion), leading Schaeffler’s profitability benchmark to drop to 11.3 percent from 12.7 percent, it said.

The family-owned company also said the implementation of an efficiency programme would impact earnings again in 2018, citing one-off costs and investments, but gave no further details.

“Schaeffler’s communication is utterly disappointing, we need an explanation on the lower margin outlook,” said Bankhaus Metzler analyst Juergen Pieper.

“This is effectively another profit warning, no wonder that investors are jumping ship,” said Pieper, who still kept his “buy” recommendation on the stock.

Schaeffler shares were heading for their biggest one-day drop since June 26 when they plunged 13 percent. The stock was down 8.5 percent at 14.855 euros as of 1200 GMT.

Last summer, the firm flagged growing price pressures from raw materials and development projects and cut its annual profit guidance.

Separately, Schaeffler said it would accelerate a group-wide efficiency programme designed to sharpen its customer focus and operational performance to boost competitiveness

$1 = 0.8046 euros Reporting by Andreas Cremer; Editing by Maria Sheahan and Mark Potter

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