Saab swings to 3Q loss, cutting 500 jobs
Swedish aerospace and defense company Saab AB on Friday swung to a third-quarter net loss and unveiled plans to cut 500 jobs in the next two years.
By Agencies |
STOCKHOLM: Swedish aerospace and defense company Saab AB on Friday swung to a third-quarter net loss and unveiled plans to cut 500 jobs in the next two years.
The company mainly blamed the weaker results on steep marketing costs, delayed orders and slow business development in South Africa. The Stockholm-based company said it was expanding its cost cutting program - aimed to reduce expenses by 1 million kronor ($135 million) a year from 2010 compared with the start of 2008 - by slashing the jobs, but that this would mainly be made through attrition.
Net loss in the quarter came to 103 million kronor ($13.8 million), compared with a previous profit of 225 million kronor in the same three months a year ago. Sales in the three-month period fell to 4.6 billion ($617 million), or 5 percent, from 4.8 billion, while order bookings plunged 21 percent to 3.1 billion kronor ($416 million).
The company's gross margin received a similar beating, dropping to 20.6 percent in the quarter, from 26.9 percent in the third quarter in 2007.
Saab's Chief Executive Ake Svensson also noted that ``global economic conditions continue to impact Saab negatively, with the financial crisis creating further uncertainty for our business operations during the third quarter.''
Despite the weaker results, the company still reiterated its 2008 forecast, saying it expects organic sales to grow between 3-4 percent, and an operating margin of 8-9 percent. Saab sold its automobile division to General Motors Corp. in 2000.
The company mainly blamed the weaker results on steep marketing costs, delayed orders and slow business development in South Africa. The Stockholm-based company said it was expanding its cost cutting program - aimed to reduce expenses by 1 million kronor ($135 million) a year from 2010 compared with the start of 2008 - by slashing the jobs, but that this would mainly be made through attrition.
Net loss in the quarter came to 103 million kronor ($13.8 million), compared with a previous profit of 225 million kronor in the same three months a year ago. Sales in the three-month period fell to 4.6 billion ($617 million), or 5 percent, from 4.8 billion, while order bookings plunged 21 percent to 3.1 billion kronor ($416 million).
The company's gross margin received a similar beating, dropping to 20.6 percent in the quarter, from 26.9 percent in the third quarter in 2007.
Saab's Chief Executive Ake Svensson also noted that ``global economic conditions continue to impact Saab negatively, with the financial crisis creating further uncertainty for our business operations during the third quarter.''
Despite the weaker results, the company still reiterated its 2008 forecast, saying it expects organic sales to grow between 3-4 percent, and an operating margin of 8-9 percent. Saab sold its automobile division to General Motors Corp. in 2000.
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