B&O Shares Plunge as Stereo Maker Cuts Forecast a Second TimeChristian Wienberg and Peter Levring
Bang & Olufsen A/S fell the most in more than four years in Copenhagen trading after the maker of luxury stereos predicted a full-year loss amid declining sales, marking its second profit warning in 10 weeks.
B&O declined as much as 18 percent, the most since December 2008. The stock fell 13 percent to 53 kroner at 10:06 a.m. in the Danish capital, with trading volume at 438 percent of the three-month daily average.
B&O said today it will lose money in its current fiscal year, ending two years of profit as plans to close under-performing stores prove more costly than previously estimated. The Struer, Denmark-based company is 19 months into a five-year plan that seeks to triple revenue and return profitability to levels from before the financial crisis started five years ago.
“The sales forecasts are lower than we’d expected, both for the quarter and the full year,” Jesper Christensen, an analyst at Alm. Brand A/S in Copenhagen, said by phone. “The numbers are disappointing, especially for their core products, but the market is also generally very tough.” Christensen said he’s intending to cut his 60-krone 12-month price target and will keep a sell recommendation on the stock.
The stereo maker today said it will lose as much as 200 million kroner ($35 million) before interest and tax in its fiscal year that ends May 31. That compares with B&O’s previous forecast of an unspecified profit. The average estimate in Bloomberg survey of six analysts conducted before today was for full-year earnings before interest and tax of 56.9 million kroner.
Full-year revenue will be as low as 2.8 billion kroner compared with a previous forecast of more than 3 billion kroner, B&O said.
The company, which sells its stereos to luxury cars including Audis and BMWs, on Jan. 9 said it will close 125 stores, mainly in Europe, and lowered its revenue and Ebit forecasts.