Tags: Electrolux | Profit | earnings | appliances

Electrolux Profit Misses Estimates, Keeps US Market Forecast

Friday, 31 Jan 2014 07:42 AM

Electrolux AB, the world’s second-biggest maker of home appliances, reported profit and sales that missed analysts estimates, weighed down by lackluster European demand and currency fluctuations. The stock fell the most in three months.

Fourth-quarter earnings before interest and taxes and one-time costs fell 23 percent to 1.22 billion kronor ($187 million), the Stockholm-based maker of AEG stoves and Frigidaire refrigerators said in a statement. The average of 11 analyst estimates compiled by Bloomberg was 1.38 billion kronor.

“Due to headwinds in the European market and significant currency fluctuations our earnings have declined,” Chief Executive Officer Keith McLoughlin said in a statement. “However, the actions that have been initiated will address the European situation to improve its profitability.”

The Swedish company is reducing expenditure and moving production to low-cost countries to counteract economic weakness in Europe while trying to capture growth by introducing products, including a new collection in China.

Electrolux shares fell as much as 6 percent in early trade in Stockholm and were down 5.8 percent to 143.8 kronor as of 9:04 a.m.

Electrolux reiterated that demand in the North American market is expected to increase by 4 percent this year and raised its forecast for the European market, where it now sees a “slightly positive” development, compared with an earlier prediction of unchanged demand.

U.S. Disappointment

The Swedish manufacturer’s North American market forecast contrasts with that of larger rival Whirlpool Corp. The Benton Harbor, Michigan-based maker of KitchenAid appliances, yesterday forecast U.S. industry shipments will increase by as much as 7 percent this year.

David J Cederberg, an analyst at Pareto Securities, said Electrolux’s earnings report was “weak” with North America a disappointment and a weaker market outlook than expected, especially compared with Whirlpool’s forecast.

Fourth-quarter sales decreased 1 percent to 28.9 billion kronor at Electrolux. Analysts had anticipated 29.5 billion kronor, the average of 14 estimates.

“Even if falling demand is leveling out in Europe, Electrolux continues to suffer from soft demand and price pressure,” analysts Fredrik Nilhov and Niclas Hoeglund at Swedbank AB said in a note last week.

One-time items of 1.5 billion kronor related to an overhead cost reduction program weighed on the Electrolux’s results. The board proposed a dividend for 2013 of 6.50 kronor a share, unchanged from a year earlier.


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Electrolux AB, the world's second-biggest maker of home appliances, reported profit and sales that missed analysts estimates, weighed down by lackluster European demand and currency fluctuations.
Electrolux,Profit,earnings,appliances
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2014-42-31
Friday, 31 Jan 2014 07:42 AM
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