Schaeffler Earnings Tumble 46% Despite Sales Gain

Schaeffler AG reports it netted €236 million in the first quarter of this year compared with €438 million in the same period of 2011.

The company blames the sharp decline on the cost of expanding capacity and the comparison to year-earlier earnings inflated by a one-time €156 million positive item.

Revenue grew 6% to €2.9 billion. Schaeffler says higher sales in North America, Asia Pacific and Germany more than offset declines in the rest of Europe and in South America.

Earnings before interest and taxes fell 15% to €401 million, and EBIT margin shrank to 14% from 17.5% in the first quarter of last year.

Free cash flow swung to a negative €107 million in the latest quarter from positive €11 million a year earlier. The company says capital spending and expenses from restructuring its debt burned through cash but it expects to return to positive cash flow sometime this year.