Losses cause Saab shares to nosedive

Losses cause Saab shares to nosedive
Swedish aerospace company Saab reported a 708 million kronor ($85 million) net loss for the fourth quarter of 2008, down from a net profit of 1.01 billion kronor the year before.

Saab shares trading on the Stockholm stock exchange fell sharply on the news, shedding nearly 20 percent of their value within 15 minutes of the opening bell to 64.50 kronor per share.

The company’s stock recovered somewhat during the morning, climbing back to 69.50 kronor at midday.

Analysts had expected Saab to report a profit of 727 million kronor, according to a survey by the Reuters news agency.

Turnover increased to 8.19 billion kronor, compared to 7.36 billion during the same period last year.

Saab’s board also recommended the company pay shareholders a dividend of 1.75 kronor per share, down from 4.50 kronor a year before.

The company posted orders worth 7.16 billion kronor during the 2008 fourth quarter, compared to 8.56 billion the previous year.

Saab expects sales for 2009 to equal the level achieved in 2008, while at the same time forecasting profit margins would sink by about 4 percent.

The disappointing fourth quarter results were weighed down in part by large one-off expenditures, including the write down of 935 million kronor related to Saab’s civilian aircraft programme due to delays in major projects.

In addition, Saab has also charged a loss of 350 million kronor due to delays in a helicopter programme, as well as a goodwill charge of 103 million kronor for its Saab Grintek Technologies subsidiary.