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STOCKHOLM, April 26 (Reuters) - SKF, the world’s biggest maker of industrial bearings, posted a quarterly operating profit well ahead of market forecasts on Thursday as cost cuts and price increases paid off amid strong global demand.
The Swedish company has gone through big changes during the past three years with Chief Executive Alrik Danielson at the helm, cutting thousands of staff and retooling its factories towards more automation.
But analysts have treated the changes at SKF with a degree of caution amid worries that the company could struggle to raise prices enough despite the stronger demand backdrop.
The Swedish company said first-quarter operating earnings rose to 2.63 billion Swedish crowns ($308 million) from 2.30 billion a year earlier, beating a 2.45 billion crown mean forecast in a poll of analysts.
“The actions we have taken to control and continually review our cost base, increase prices and focus on meeting the specific application needs of our customers are showing results,” SKF CEO Danielson said in a statement.
The company said it expected higher year-on-year demand in the second quarter, with growth in both its industrial and automotive businesses expected.
SKF, which competes with the likes of Germany’s Schaeffler , reported organic sales growth of 7.5 percent in the quarter, higher than market expectations for a 6.7 percent rise.
SKF shares are down 5 percent this year compared with a 2 percent drop in the European industrial sector. The stock has had a weak run in the run-up to the results, falling 6 percent in the past week.
$1 = 8.5479 Swedish crowns Reporting by Johannes Hellstrom Editing by Niklas Pollard and Matthew Mpoke Bigg