Electrolux's Q3 Profits Up 12%
By Alan Wolf -- TWICE, 11/3/2008
STOCKHOLM, SWEDEN — A combination of price hikes and cost reductions helped Electrolux increase operating income 11.6 percent to $189.4 million during its third quarter.
Net sales rose 1.6 percent to $4.2 billion during the three months, ended Sept. 30.
In North America, operating income fell 20.5 percent to $49.2 million, and net sales slipped 2.4 percent to $1.3 billion.
North American profits were impacted by the U.S. housing market crash and about $8 million in launch costs for the company's new Electrolux premium appliance platform.
"The financial crisis has without a doubt affected the consumption levels of appliances," observed president/CEO Hans Stråberg. "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."
On a positive note, the company's mass-market Frigidaire brand grew share during the third quarter, and the vendor implemented its third round of price hikes in a year to offset the rising costs of raw materials.
Stråberg added that the U.S. launch of the new Electrolux line "continues to exceed our expectations," with sell-through at some 3,000 retail doors.
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