July 16 (Bloomberg) -- Husqvarna AB, the world’s biggest maker of powered garden tools, reported second-quarter profit that beat analyst estimates after reducing costs in North America and as European demand was helped by an early spring.
Net income increased 48 percent to 971 million kronor ($142 million), the company said in a statement today, and compared with the average estimate of 927 million kronor in a Bloomberg survey of analysts. The stock rose as much as 6.4 percent, the most in almost three months, and was up 5.6 percent at 2:18 p.m. in Stockholm.
The second quarter is Husqvarna’s strongest, with about two-thirds of annual operating profit typically recorded in April to June as demand for lawn and garden products spikes during spring and early summer. Husqvarna, whose products are marketed under brand names including Flymo, Gardena and McCulloch, has a target of an annual operating margin of 10 percent by 2016. The second-quarter margin was 12.5 percent.
“Europe benefited from positive weather conditions in the second quarter, while North America was challenged by a late spring and high trade inventory,” the Stockholm-based maker of chainsaws said in the statement.
The manufacturer could see sales fall this quarter compared with a year earlier, when a July heat wave in Europe and a late start to the season in North America boosted demand for its products, Chief Executive Officer Kai Waern said in a telephone interview.
“There’s nothing so far that indicates anything other than that the third quarter will be an average quarter,” said Waern, who has been CEO for one year. It is “statistically more likely” that sales will be lower compared with a year earlier, he said.
Revenue in the second quarter increased to 11 billion kronor, from 10.2 billion kronor, amid the favorable weather conditions in the European market, which is Husqvarna’s largest.
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