2011 was a difficult year for Husqvarna

Husqvarna (OMX: HUSQ B) reported Q4 2011 earnings on Thursday. Initial market reaction was negative but the losses were regained on Friday as the markets got more time to digest the power product maker’s prospects. Sales in the typically slow fourth quarter were just under 5 billion (+4%), EIBTDA 55 million and income after financial items -363 million.

Full-year sales were down 6% to just above 30 billion SEK. Operating profit was2.6 billion and net profit just under 1 billion (EPS 1.73 SEK vs. 3.03 in 2010). The Board of Directors suggests dividend to be maintained at 1.5 SEK a share. AGM date is March 28th. Subject to the motion being approved, the stock will trade ex-dividend on the 29th with estimated payment on April 5th.

Production problem at Orangeburg, South Carolina, USA production site continued to hinder performance all year. Husqvarna closed Beatrice, NE plant in 2010 and moved production into Orangeburg. The shift hasn’t happened perfectly and new product launches have created further issues wherein the material complexity of the products has lead to problems. Orangeburg is the largest production site of the company with some 1500 worker on average. The priority for 2012 is to secure deliveries to customers and this seems likely to be achieved at the moment.

Consumer demand outlook is difficult to assess in the company’s view. The product mix is supposedly slightly better in 2012 with similar visibility among the large retailers as in 2011. Gardening season is important for the company as its main products include lawn-mowers, tillers, chainsaws, trimmers, edgers and cutters. The offering for construction and stone industries is also focused on cutting things with various sawing, cutting and drilling equipment offerings. The stock closed on the nose of 40 SEK on Friday.