Husqvarna Q1 pretax beats expectations on professional services ops UPDATE

Husqvarna Q1 pretax beats expectations on professional services ops UPDATE

	Published : Thu, 19 Apr 2007 12:35 By : Agencies Print this Story

(updating with performance of consumer products and professional products)

STOCKHOLM (Thomson Financial) - Outdoor gardening equipment supplier Husqvarna AB reported an 11 pct rise in its first-quarter profit after financial items to 876 mln skr, boosted by a strong performance at its professional products division.

Market expectations were for a first-quarter profit after financial items of 836 mln skr, according to SME Direkt.

Sales fell 1 pct to 9.214 bln skr, but were still above analysts' forecasts of 9.124 bln skr.

On a pro forma basis, the operating margin amounted to 9.5 pct compared with 8.5 pct a year earlier.

First-quarter sales at the professional products business area increased 7 pct from a year earlier to 3.007 bln skr and operating profit by 12 pct to 510 mln skr, buoyed by a strong performance at the commercial lawn and garden division.

'The increase in sales refers mainly to good growth in Europe for (lawn cutter) riders,' said Husqvarna, 'Both operating income and margin rose (at commercial lawn), due mainly to higher production volumes, improved productivity and a better product mix'.

Market demand for professional chainsaws was 'largely unchanged' from a year earlier, the company said, while also estimating that demand for diamond tools and cutting equipment for the construction sector declined in the US, but showed some growth in Europe.

Sales at the company's consumer products business area fell 5 pct to 6.207 bln skr from a year earlier, hit by adverse currency effects. In comparable currencies, sales 'increased', Husqvarna said. Deliveries were largely unchanged.

Operating profit at the division rose 4 pct to 521 mln skr, helped by increased profitability in the US on an improved product mix, and higher profits from Europe on the positive effects of exchange rates relating to products imported from the US.

Inventories at the company's consumer products division were 'significantly lower' than in the first quarter of 2006, it said.

simon.richardson@thomson.com

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