Adjusted operating margins have improved at SKF even before the company sees any effect from the layoff of 1,700 workers across its global footprint.

SKF officials recently released the company’s third quarter financial results. Organic sales increased by 2% year-over-year, mainly driven by favourable comparable figures, while market conditions in the third quarter remained similar as in the previous quarter.

Net sales decreased from $23,692,000 kroner in the third quarter of 2024 to $22,482,000 kroner in the third quarter of 2025 while net sales year-to-date decreased from $73,997,000 kroner to $69,614,000 kroner from 2024 to 2025. Operating profits have decreased year-over-year from 2,526,000 kroner to 2,007,000 kroner in the third quarter while year-to-date profits decreased from 8,008,000 kroner to 6,192,000 kroner.

“As you can see on this chart, after eight consecutive quarters of negative organic growth, we are actually back to organic growth in the quarter,” said Rckard Gustafson, SKF president and CEO. “Actually, it’s primarily driven by our industrial business, where we have seen growth across our geographies, while automotive is still more volatile and a more negative demand environment. This performance was actually slightly better than we anticipated walking into this quarter. However, the underlying market conditions have not significantly changed in this quarter versus the second quarter, and to some extent we are also helped by favorable comparison figures compared to Q3 last year.

Industrial business grew 4% with improved organic sales in all regions, especially in Asia and Americas. In China, policy-driven pre-buy effects within SKF’s Wind business continued, and performance in India remained strong. In the Americas, SKF’s growth in the third quarter was mainly driven by tariff-related price increases. Conditions in Europe remained overall challenging with Aerospace and Magnetic bearings being the main contributors to growth.

Organic sales in SKF’s Automotive business declined -2% driven by weak market demand, especially in North America.

Gustafson said that despite challenging market conditions and a significant negative currency impact, SKF’s adjusted operating margin improved compared to the same quarter last year to 12.3%,. Previously announced rightsizing initiatives continue with savings primarily through 2026-2027, and limited savings realized in the third quarter of 2025. In August, SKF signed an agreement to divest its precision elastomeric device operation in Elgin, Ill., that is expected to close during the fourth quarter of 2025. The divestment will complete the sale of non-core businesses identified in a strategic review of the Aerospace Division that is home to SKF’s Falconer plant. In October, SKF reorganized its operations in Argentina by ending production at its Tortuguitas plant, which employs 145 people.

“It’s our good cost control and also that we benefit from previous investments that were done in regionalization and in world-class manufacturing. Turning to cash flow, coming in short of the same quarter last year, primarily driven by higher items affecting comparability, where automotive is the main or the automotive separation is the main driver behind that,” Gustafson said.

SKF has worked to compensate for increased tariff costs, with further price adjustments likely after President Donald Trump’s recent announcement of Section 232 tariffs on steel and aluminum.

“We have talked about the tariffs a number of times, and we said at the group level, we do believe that we will be able to largely compensate for the tariff impact, and that has been the case also in this quarter,” Gustafson said. “We also said that the majority of the net negative impact from tariffs will be found in automotive, and that is also the case. With that in mind, and also the fact that FX had had a really significant impact on the earnings in this quarter, I do believe that the adjusted operating margin performance, not just shy of the same level as last year, is a rather good delivery.”