Bloomberg

(Bloomberg) -- Bang & Olufsen shares soared to their highest level in more than six years after the luxury hi-fi producer delivered a set of earnings that showed it’s getting better at squeezing profit out of its sales.

The Danish company, which made more money after unveiling a new range of products to entice top earners back to its stores, saw its stock jump as much as 8.1 percent after the market opened in Copenhagen. The shares traded up 4.7 percent at 90 kroner as of 10 a.m. in the Danish capital. The company hasn’t traded higher since October 2008.

“Transforming sales to profit has been the company’s Achilles heal for a long time,” Morten Imsgard, an analyst at Sydbank, said by phone. The second-quarter results “show that the company’s efficiency plans are working.”

B&O launched new TVs in August, BeoVision 14, which costs as much as $11,500 for the biggest model with all the fixings, and BeoVision Horizon. One of the company’s most expensive TVs, the BeoVision Avant, costs more than twice that.

“It very important for B&O to keep introducing new products,” Imsgard said. “B&O’s sales always plunge when they fail to update their portfolio with new products and it’s tough for them to regain ground. Customers in this segment don’t want to buy luxury TVs that have been on the market for many years, they want something new.”

B&O’s revenue rose to 867 million kroner ($124 million) in the second quarter from 729 million kroner a year earlier, the company said on Friday. It had earnings before interest and tax of 37 million kroner, compared with a 14 million-krone loss the previous year. Management also clarified its full-year outlook, telling investors that sales will rise as much as 15 percent this fiscal year.

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net.

To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net.

©2017 Bloomberg L.P.

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