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UPDATE 2-Bearings maker SKF shares ease after Q1 profit matches forecasts

(Adds CEO, analyst comment, updates shares)

STOCKHOLM, April 22 (Reuters) - Sweden’s SKF, the world’s biggest maker of industrial bearings, expects sales to reach pre-pandemic levels in the current quarter, it said on Thursday, after reporting quarterly earnings in line with forecasts.

SKF, which rivals Germany’s Schaeffler, said demand had improved gradually since the trough in the second quarter last year when coronavirus lockdowns around the world hit economic activity.

“Net sales are expected to continue to grow, reaching pre-COVID levels in the second quarter of 2021, that is, in line with levels reported in the second quarter of 2019,” said Chief Executive Alrik Danielson, who is stepping down next week.

SKF shares, which have climbed about 14% this year, were down 5% at 0850 GMT.

U.S. bank Citi said the company faced challenges from high logistics and raw materials costs while SKF said it would continue to adjust prices to offset inflation.

Danielson told an analyst call that the global semiconductor shortage that has forced global automakers to reduce production in recent months could have a “minor effect” in the second quarter, adding that the likely impact was still unclear.

SKF has been helped by a strong demand recovery among its automotive customers after many of its major markets were in lockdown due to the coronavirus pandemic.

First-quarter operating earnings rose to 2.70 billion Swedish crowns ($322 million) from 2.27 billion a year earlier, compared with the 2.74 billion forecast in a Refinitiv poll.

Quarterly organic net sales were up 8.6% year-on-year with SKF’s automotive business, which generates about 30% of overall sales, up 16.7% and its industrial division, which accounts for 70% of sales, up 5.4%.

SKF’s earnings came on the heels of Schaeffler on Monday pre-releasing better than expected quarterly earnings. ($1 = 8.3947 Swedish crowns) (Reporting by Helena Soderpalm; Editing by Simon Johnson and David Clarke)

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