UPDATE 2-Industry bellwether SKF reports tentative recovery
* Q2 EBIT 1.84 bln SEK vs forecast 1.70 bln
* Says demand slightly better than expected in Q2
* Driven by surprise pick up in European car production
* Forecasts flat demand in Q3 vs Q2, risk on upside
* Shares up 3 percent
(Adds CEO, analyst comments, detail, background, shares)
STOCKHOLM, July 16 (Reuters) - SKF, the world's biggest maker of bearings and a bellwether of the manufacturing sector, reported a tentative improvement in demand, driven by a surprise pick up in sales to Europe's car industry as well as energy and aerospace customers.
However the Swedish group, whose bearings are used in products ranging from dishwashers to wind turbines, struck a cautious tone about the months ahead, saying demand would probably consolidate at second-quarter levels for now.
Manufacturers across the world are struggling with a protracted recession in parts of Europe, a tepid U.S. economic recovery and slowing growth in China. The International Monetary Fund cut its global growth forecast last week, underscoring the uncertain outlook for the world economy.
"Demand was somewhat higher than we expected and that was driven by the automotive business," SKF's long-time Chief Executive Tom Johnstone said of the second quarter.
"For the coming quarter I see the risk is more on the upside than the downside. But I've got to say it's still a difficult market environment to judge."
SKF, which competes with U.S. group Timken and Germany's Schaeffler AG, said on Tuesday its quarterly operating profit fell to 1.84 billion Swedish crowns ($275 million) from 2.05 billion in the same period last year.
That beat analysts' average forecast of 1.7 billion crowns in a Reuters poll, helped by cost cuts.
Nomura analysts said they expected earnings per share estimates to rise 3-6 percent for 2013 and 2014 on the back of the results, and SKF shares were up 3.2 percent to 171.9 crowns at 1135 GMT in a flat European industrials index.
While SKF did not see a major pickup in demand in its main industrial markets, its automotive business saw a surprise improvement in the second quarter with sales up 2.6 percent against the 6.4 percent fall seen by analysts.
"From the car business, we saw very good growth," Johnstone said. "And that was mainly due to Europe. Europe's car production has not gone (down) as expected in the quarter."
Data on Tuesday showed European car sales fell to their lowest level for 20 years in the first half of this year, though the rate of decline has slowed recently.
While steadier car production played a part, SKF said it also benefited from better output of car models using its products, as well as a stronger service market.
An upturn for the long-suffering truck industry provided a boost as well, a reassuring sign ahead of reports by truck makers such as Daimler, Volvo and Scania over the coming week.
Though demand was up slightly on the second quarter from the first, SKF has had six straight quarters of falling sales volumes on an annual basis.
Johnstone, a Scotsman and a rare non-Swedish executive at the country's blue-chip companies, predicted a return to slight growth year-on-year in the third quarter.
The Gothenburg-based group, which earlier this year unveiled plans to cut 2,500 jobs due to weak demand, said that among major regions only Latin America was expected to show firmer demand in the third quarter from the second, while Europe, Asia and North America were all seen flat.
The company raised its production slightly in the second quarter and would remain at that level in the third, it added.
($1 = 6.6905 Swedish crowns)
(Editing by Alistair Scrutton and Mark Potter)