Bang & Olufsen warns on profits

B&O is having difficulties even in traditionally strong markets like Europe

Luxury electronics maker, Bang & Olufsen (B&O), has issued a profit warning for 2007/8 as a slump in sales threatens its balance sheet.

The Danish company cut its pre-tax profit estimate to 155m Danish crowns ($32.5m; £16.5m) for the year ended May 31, from between 200m and 250m crowns.

The company said the uncertain global economy was making it difficult to anticipate "market developments".

B&O also revised its full-year sales figures to 4.1bn (£463.3m) crowns.

This is down from a previous forecast of between 4.25bn and 4.35bn crowns.

Meanwhile, operating profit of 195m crowns is forecast, down from an earlier estimate in the range of 225m and 257m crowns.

The top-of-the-range television and stereo maker - whose TVs can sell for about £15,000 - has been feeling the effects of the economic downturn as consumers reign in non-essential spending in a bid to counterbalance rocketing fuel and food prices.

B&O issued a previous profit warning in March and sacked former boss Torben Sorensen in January after it saw a 37% decline in half-year profits.

Kalle Hvidt Nielsen is set to take up the reins on 1 August.

B&O's key markets are Denmark, the UK, Germany, and the US.