Bang & Olufsen quarterly profits miss expectations
By Mette Fraende
COPENHAGEN | Wed Apr 13, 2011 5:35am EDT
(Reuters) - Bang & Olufsen missed analysts' expectations despite a rise in third quarter profits, dragged down by static audio-visual sales as well as a one-off payment associated with the departure of its former CEO.
The Danish luxury electronics maker said on Wednesday turnover in the automotive division rose by 123 percent in three months to end November compared with the same quarter the year before, but that sales in its audio-video division had been at a stand-still.
Sales in the audio-video division accounted for slightly over 80 percent of total group sales in the third quarter.
Shares in Bang & Olufsen rose 4.2 percent at 0910 GMT, outperforming a 0.4 percent fall in the Copenhagen Bourse's Benchmark index.
"B&O has indirectly improved its results as they have booked some costs, 21 million crowns, of which a large part are related to the exit of their chief executive," said Sydbank analyst Nicolaj Jeppesen.
"But we still see that they are not managing to grow their core business (audio-video) and that automotive still drives the result."
"We need to see its core business beginning to grow soon as this is what ought to drive the group in the future," Jeppesen said.
Bang & Olufsen has grown as a supplier of audio systems for upmarket cars including Aston Martin, Audi and Mercedes.
Sales in the automotive division are rising steeply but still accounted for just 113 million crowns out of 820 million in total group sales in the third quarter.
The group said it had been necessary to postpone the launch of its new product, BeoSound 5 Encore, until the first quarter of the 2011/12 financial year, not giving further details.
The group said it expected sales for the full 2010/11 financial year of 2.85 billion Danish crowns which was roughly in line with an average 2.
Full-year pretax profit was expected to land at 40-50 million crowns, it said, lagging 52.8 million expected by analysts in the poll.
The producer of high-end sound systems and televisions had not previously given any figures for the 2010/11 full-year, but had said it expected a "positive development" in turnover and "positive result before tax."
Third-quarter pretax profits rose to 30.3 million Danish crowns in the three months to end-February from 28.4 million in the same quarter a year earlier, but lagged an average 36.4 million estimated by analysts in the Reuters poll.
The result was negatively affected by 21 million crowns, of which 14 million was attributed to costs associated with the departure of its former chief executive Kalle Hvidt Nielsen, the company said in the statement.
(Additional reporting by Shida Chayesteh; Editing by Mike Nesbit)
Credit: Reuters (www.reuters.com)
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