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Electrolux posts 11 pct rise in 3Q profits

Electrolux posts 11 pct rise in 3Q profits

Swedish appliance maker Electrolux AB on Monday said third-quarter profits rose 11 percent as the company reaped the benefits of cost-cutting, but warned that the financial crisis was taking a toll on sales.
The company said net profit for the period increased to 847 million kronor ($107 million) from 762 million in the third quarter of 2007. However, sales for the quarter nudged down to 26.35 billion kronor ($3.31 billion) from 26.37 billion a year earlier.
Electrolux shares rose 2.8 percent to 55 kronor ($6.92) in Stockholm.
Chief executive Hans Straberg said the financial crisis has "without a doubt affected the consumption levels of appliances."
"Many consumers are postponing their purchases or choosing less expensive products. And there's no evidence that the weak market developments will turn around in the near future," he said in a statement.
However, he said the company is starting to see results of cost-cutting measures in Europe and has recognized an even bigger potential to reduce costs in that area.
Straberg said Electrolux has implemented its third price increase in one year in North America to compensate for the rising costs of raw materials.
Swedbank analyst Johan Dahl said the result was better than expected, especially in North and Latin America, while the development in Europe was weaker.
"In North America they continue to take market share and manage to keep their earnings unchanged despite the difficult market situation," he said. "In Latin America the volumes continue to develop extremely strongly."
He said it was mainly margins that outperformed expectations, while sales were only a little bit better than forecast.
Electrolux kept its outlook for the full year unchanged, saying it expects an operating income of between 3.3 billion and 3.9 billion kronor ($415 million and $490 million).
Straberg also said the company's launch of a new premium appliance line in North America was a "great success."
The rollout of the new brand has weighed heavily on the profits on previous quarters, but Straberg said those products are now sold in more than 3,000 retail outlets across North America.
Electrolux has previously only sold large appliances in North America under the Frigidaire and Electrolux Icon brands.


Updated : 2021-05-14 19:50 GMT+08:00