Stockholm, Sweden-based Husqvarna last week reported that net sales for the third quarter 2006 decreased by 12 percent to U.S. $740.1 million compared with U.S. $845.2 million for the same period in the previous year. After adjustment for exchange rate fluctuations, net sales decreased by 8 percent.

The decline in net sales refers to the Consumer Products business area, particularly in North America. Sales for consumer products were adversely affected during the quarter by substantial inventory reductions by retailers, particularly in the United States, following unfavorable weather and lower consumer spending in the first half of the year. Net sales for professional products were higher than in the third quarter of 2005.

Income for the period was U.S. $44.2 million, a decrease from the U.S. $47.5 million reported in 2005, corresponding to U.S. 15 cents per share before dilution, compared with U.S. 16 cents last year.

Husqvarna’s net sales for the first nine months of 2006 rose by 5 percent to U.S. $3.4 billion compared with U.S. $3.3 billion for the same period in the previous year. After adjustment for exchange rate fluctuations, net sales rose by 2 percent.

According to the company, the market for professional chainsaws is estimated to have declined somewhat in volume in comparison with the third quarter of 2005, when hurricanes in the U.S. stimulated demand. Group sales of commercial lawn and garden equipment rose somewhat over the previous year on the basis of good growth in Europe for riders as well as the acquisition of Dixon Industries in the U.S., which was consolidated as of August. Income declined, mainly due to costs related to integration of the new acquisition.

Demand for diamond tools and cutting equipment for the construction industry is estimated to have declined slightly in comparison with the third quarter of 2005. Group sales declined somewhat in Swedish kronor but were unchanged in comparable currencies. Operating income and margin improved somewhat, mainly as a result of previously implemented restructuring.

In related company news, Husqvarna signed a letter of intent with Komatsu Ltd. of Japan to acquire the outdoor power products operation within Komatsu Zenoah Co.

Komatsu Zenoah is a producer of portable outdoor power products and is the market leader in Japan. The outdoor-product range comprises mainly brush cutters, chainsaws, trimmers and blowers.

Sales for this operation in 2005/2006, the latest fiscal year, amounted to approximately U.S. $160 million. A final agreement is expected before year-end, subject to due diligence and approval by the relevant authorities. The company expects the acquisition to be completed by the first quarter of 2007. The operation will be integrated in the group's Professional Products business area.