Like many global manufacturers, SKF has been hit by industry-wide supply chain issues and cost inflation which it has sought to mitigate by raising prices and cutting spending. An exit from Russia has also dented growth.
Second-quarter adjusted operating earnings fell to 2.47 billion Swedish crowns ($241.58 million) from 3.12 billion a year earlier, lagging the 2.73 billion mean analysts' forecast according to Refinitiv estimates.
SKF said the war in Ukraine and Chinese COVID-19 lockdowns had resulted in "exceptionally challenging circumstances" in April and May, hitting its margins as material, utilities and logistics costs mounted by 600 million crowns sequentially.
"Market conditions in June were more normalized. This, in combination with further price increase realization, resulted in more stable earnings towards the end of the quarter," Chief Executive Rickard Gustafson said in a statement.
The company, whose rivals include Germany's Schaeffler, said it still expected organic, or like-for-like, sales growth of about 4%-8% in 2022.
"Looking into the third quarter of 2022, we expect a high single-digit organic sales growth," Gustafson said.
"We expect that the high level of volatility in the markets continues with the ongoing war in Europe, high inflation, a risk for Covid-19 related restrictions across many geographies, supply chain bottlenecks and a volatile demand."
Organic sales grew by 5.4% during the quarter, with growth recorded in both its arms. The manufacturer generates about three quarters of group sales from its industrial business and the rest from the automotive sector.
($1 = 10.2242 Swedish crowns)
(Reporting by Niklas Pollard, editing by Helena Soderpalm and Andrew Heavens)
