Electrolux Net Falls 15 Percent in Q1; North America Posts Strong Performance
STOCKHOLM-Although the company's North America operations reported healthy results, Electrolux's first quarter resulted in a 15 percent decline in net income for the company as a whole, to SEK422 million ($65.4 million).
In North America, according to a summary from an Electrolux spokeswoman, operating profit rose 262 percent to $71 million, on a net sales gain of 12 percent to $1.2 billion. Here, Electrolux enjoyed higher sales volumes in core appliances, room air conditioners and consumables, including market-share increases in refrigerators, freezers, electric cooking products and room air conditioners. The bottom line in this region was boosted by improvements in price and product mix, and operational efficiency, the spokeswoman said.
In his comments on the quarter, Keith McLoughlin, Electrolux's president and CEO, said of North America, "We are seeing evidence that the recovery in the housing market is finally generating increased consumption of appliances. Furthermore, after an extended period of consumers trading down to less expensive products, they are now purchasing more high-end products, yielding a positive product mix."
Overall, however, Electrolux's net sales slipped 2 percent to SEK 25.3 billion ($3.9 billion). The gains in North America--along with sales growth in Asia and Latin America--were offset by weakness in the company's European market. McLoughlin said the results in Europe suffered from weak consumer confidence, resulting in declining sales volume and negative price and product mix.
McLoughlin said, "At some point, demand in Europe will rebound and, combined with a recovery and a stronger market in North America and continued strong growth in our emerging markets, Electrolux will exceed all key financial objectives."