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Swatch Earnings Miss Estimates On Hong Kong, Strong Franc

Swatch Group AG reported 2015 earnings that missed analyst estimates as sales declined for the first time in six years, hurt by slumping demand in Hong Kong and the strength of the Swiss franc.
By
  • Bloomberg

BIEL, Switzerland — Swatch Group AG, the maker of Tissot and Omega timepieces, reported 2015 earnings that missed analyst estimates as sales declined for the first time in six years, hurt by slumping demand in Hong Kong, the Swiss watch industry's largest market, and the strength of the Swiss franc.

Operating profit declined 17 percent to 1.45 billion Swiss francs ($1.4 billion), the Biel, Switzerland-based company said in a statement Wednesday. That compares with the 1.56 billion- franc average estimate of analysts in a Bloomberg survey. Swatch also said it plans to buy back as much as 1 billion francs of stock through February 2019.

The outlook for the Swiss watch industry is souring after Chinese economic growth slowed to the weakest pace in more than two decades and as stock markets and oil prices tumble. Switzerland’s watch exports fell 3.3 percent in 2015, led by a 23 percent drop in Hong Kong, according to the Federation of the Swiss Watch Industry.

Swatch said it plans a dividend of 7.50 francs a bearer share and 1.50 francs per registered share. The Bloomberg forecast was a dividend of 8 francs a bearer share.

By Corinne Gretler; editors: Matthew Boyle, Thomas Mulier.

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