SKF Earnings: Earnings Beat Expectations Following Price Hikes and Product Adjustments

Narrow-moat SKF’s second quarter outperformed our expectations with record net sales of SEK 27.1 billion and organic revenue growth of 8.0%. SKF’s EBIT margin also strengthened to 13.3% , up 280 basis points year over year, as price hikes and trimming less profitable products helped offset cost inflation more than anticipated. The ongoing re-positioning of the automotive segment continues to bear fruit with segment EBIT margin strengthening to 7.1%, up 560 basis points year over year. While organic sales growth was broad-based, demand from electric vehicle, railway, and renewable energy customer industries were the largest drivers growing 26%, 20%, and 18% respectively.