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B&O losses deeper than forecast, sees break-even

Published 08/11/2009, 07:39 AM
Updated 08/11/2009, 07:42 AM
TGT
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* Danish upmarket TV maker Q4 loss 109 million Danish crowns

* Losses worse than expected and sharply down yr/yr

* Sees pretax break-even 2009-10 results

By Teis Jensen

COPENHAGEN, Aug 11 (Reuters) - Struggling Danish upmarket television and stereo maker Bang & Olufsen (B&O) posted a deeper than expected final quarter loss, but said it aimed for a break-even result in fiscal year 2009-10.

The company, which has seen earnings collapse as the economic downturn erodes sales of its products, said pretax losses for the fourth quarter of B&O's 2008-09 financial year grew to 108.8 million Danish crowns ($20.70 million) from a loss of 37 million in the year-ago quarter.

The average estimate in a Reuters survey of eight analysts was for a pretax loss of 90 million crowns.

Bang & Olufsen shares fell 3.0 percent to 48.5 crowns while the Copenhagen bourse's bluechip index fell 0.2 percent at 1126 GMT.

"In keeping with the strategy plan, Bang & Olufsen has focused on product development aimed at launching more new products," the company said in the report.

Sales fell to 617 million crowns in the fourth quarter from 640 million crowns in the third quarter and 885 million a year earlier. Analysts' average expectation was for sales of 638 million crowns.

"We did not get an increase in revenue as I had hoped, but at least there is a stabilisation," Jyske Bank analyst Rune Moller said.

For the full year to end-June B&O posted a pretax loss of 523 million crowns, which was worse than analysts' average expectation of a loss of 505 million crowns and B&O's own guidance for a pretax loss of 510 million.

Full-year sales reached 2.79 billion crowns, which roughly equalled analysts' average expectation and B&O's guidance which both were around 2.8 billion crowns.

B&O's sales have dropped significantly from 4.09 billion crowns in 2007-08 and 4.4 billion the year before. Pretax profit was a positive 154 million crowns in 2007-08 and 524 million crowns the year before.

B&O said it expected to achieve a break-even result before tax for the 2009-10 financial year, based on turnover a little below a previously announced target of 3.2 billion crowns.

"We had expected that B&O would downgrade (revenue) expectations, but not yet," Moller said. "It is still hard to see how they can meet their expectations for both revenue and results in 2009-10."

Analysts in the Reuters poll had on average expected 2009-10 sales of 2.89 billion crowns. ($1=5.255 Danish Crown) (Reporting by Teis Jensen; Editing by Jon Loades-Carter)

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