Husqvarna Production Problems Hurt First Quarter Results
Apr 20, 2011
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Husqvarna President and CEO Magnus Yngen, in a statement released on April 19, 2011, said that production problems at the company's largest plant in North America means it was unable to adequately capitalize on strong demand that was seen in the North American markets at the start of 2011. Husqvarna, based in Stockholm, is one of the world's largest producers of outdoor power equipment for residential and commercial/professional use.

"The disturbances (manufacturing problems) negatively affected shipments and increased costs significantly," Yngen said. "Costs were approximately SEK 150 million higher, whereof the majority in March. We are taking measures in order to resolve the situation and to minimize the impact for our customers but we will continue to have high costs throughout the season."

Husqvarna Group as a whole saw first quarter 2011 sales up 6% and operating income up 7% (after adjusting for exchange rate and items affecting comparability) compared to the first quarter of 2010.

"The year started off with significantly higher order intake compared to 2010," Yngen said. "Europe & Asia/Pacific delivered strong results as a result of higher sell-in and a positive mix development. Construction continued its steady improvement in sales, earnings and margin. As a consequence of the disturbances, operating income for Americas was negative in the first quarter."

The group as a whole reported:
• 1Q 2011 net sales were SEK 8774 million (approx US$1433 million), compared to 9082 million in 1Q 2010.
• 1Q 2011 operating income was SEK 662 million, compared to 778 million in 1Q 2010
• 1Q 2011 income was SEK 484 million, compared to 535 in Q1 2010.

Higher volumes and a positive mix contributed to improved sales and operating income for in Europe and in the Asia/Pacific region.

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