Bang & Olufsen Plunges as Stereo Maker Mulls Raising Capital
Bang & Olufsen A/S (BO) fell as much as 21 percent after the Danish maker of luxury stereos and televisions reported a wider-than-anticipated third-quarter loss and said it’s considering raising capital to accelerate growth.
That’s the steepest intraday decline in six years. The shares traded 15 percent lower at 55.50 kroner at 12:50 p.m. in Copenhagen, cutting the company’s market value to 2.2 billion kroner ($410 million).
The electronics maker’s 28 million-kroner loss before interest and taxes for the three months through February was more than double what analysts expected. Sales of the B&O Play line of one-piece music systems and headphones declined 25 percent to 122 million kroner, set back by “too low” a level of product introductions, Chief Executive Officer Tue Mantoni said in a statement.
B&O Play is “where everybody expected them to grow, but in this quarter and the quarters before it’s really been tough for them in that segment,” Jesper Christensen, an analyst at Alm. Brand A/S, said by phone. “So it’s a very tough time to go out and raise capital for growth when your growth story is so uncertain.”
Bang & Olufsen is studying ways to raise funds as it plans to increase spending on distribution and marketing as well as strengthen its product portfolio through research and development, the Struer, Denmark-based company said today. The shares had been halted ahead of the announcement.
Revenue increased 3 percent to 675 million kroner, compared with the 736 million analysts expected.
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