Biting recession
Thursday, 19th April, 2012The worldwide recession continues to bite with Bang & Olufsen yesterday reporting missed financial forecasts with a 38% fall in third-quarter profit, hurt by weaker sales and the late arrival of new products in a very difficult market. The result was below the company’s own expectations, missed forecasts in a Reuters‘ poll, and mirrored other luxury goods makers’ slowdown in quarterly sales as the financial crisis continues to affect worldwide trade.
“The key issue and challenge that we have had is definitely timely arrival of new products” stated Chief Executive Tue Mantoni yesterday in a Webcast on the company’s third-quarter results.
Shares in the company fell sharply in early trading, down 6.7 % to 70.0 Danish crowns per share at 0700 GMT 18.04.2012, against a 0.3% rise in the Copenhagen stock exchange’s benchmark index .OMXC20.
“Bang & Olufsen delivered a weaker result than expected in a continuing difficult market” chief executive Tue Mantoni stated.
Third-quarter pretax profit fell to 18.8 million Danish crowns ($3.3 US million), compared with a forecast for 55.4 million. Third-quarter sales fell to 766 million crowns from 820 million a year earlier, below a 861 million average forecast by analysts.
“It is a very disappointing topline that they are delivering this quarter” brand analyst Michael Friis Jorgensen said: “They keep their guidance, but that looks very difficult now.”
Band & Olufsen said it still expected pretax profits for the 2011/12 financial year of around 100 million Danish crowns ($17.56 US million) based on a revenues exceeding 3 billion crowns. That would be a rise from its full-year 2010/11 pretax profit of 40.1 million crowns and revenue of 2.87 billion.
The company said three new products: BeoVision 12, Beolit 12 Airplay and BeoLab 12 would help drive results in the fourth quarter.
