Struggling Danish upmarket television and stereo maker Bang & Olufsen (B&O) posted deeper-than-expected losses for the final quarter, but said it was aiming for a break-even result in financial year 2009-10.
B&O, which has seen earnings collapse as the economic downturn knocks sales of its luxury products, said pretax losses for the fourth quarter of its 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 sank 7.2 percent to 46.40 crowns by 1412 GMT, when the Copenhagen bourse's bluechip index was down 1.2 percent.
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.
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.
What we have seen in Q4 and at the start of this year is that there are still some uncertainties in the markets, Chief Executive Kalle Hvidt Nielsen said in a teleconference.
He said B&O would need to work extremely hard to meet its initial 3.2 billion crown sales guidance for the year ahead, despite successful product launches.
We have also seen a tendency for the market to be slightly tougher than what we originally put into our expectations. Therefore we are softening the guidance, Nielsen said.
B&O has been cutting costs, which has resulted in a lowering of the break-even turnover.
(First-quarter) results will be impacted positively by all the things we are doing, Nielsen said.
On the other hand, when trying to compare that to a result last year -- before the financial crisis -- you should not expect any improvement on the Q1 basis, Nielsen said.
Analysts in the Reuters poll had on average expected 2009-10 sales of 2.89 billion crowns.
Jyske analyst Moller said he had expected B&O to downgrade its sales expectations, but not yet. It is still hard to see how they can meet their expectations for both revenue and results in 2009-10, he 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.
($1=5.255 Danish Crown)
(Editing by Jon Loades-Carter)