Electrolux's U.S. Sales Up 5% In Q2
By Alan Wolf -- TWICE, 8/6/2007
STOCKHOLM, SWEDEN — Strong U.S. sales and a booming offshore floor care business helped Electrolux grow net revenue 1.8 percent to $3.8 billion during the second quarter, ended June 30, while operating income increased 3.2 percent to $132.3 million for the three-month period.
Also contributing to the global results was an improved product mix and more efficient production, the company said.
In North America, net sales bucked U.S. industry trends by rising 4.6 percent to $1.3 billion during the quarter, while operating income rose 20.7 percent to $62.7 million excluding currency fluctuations. Electrolux cited strong sales of refrigeration, laundry and dishwashers for its market share gains, and attributed the solid showing to the manufacturer's limited exposure to the weak home builders' channel. Conversely, sales of floor-care products decreased slightly during the quarter amid weaker U.S. market demand.
It credited its U.S. operating profit gains to increased production volumes and efficiencies, which helped offset higher raw material costs.
In a statement, Electrolux president/CEO Hans Stråberg said, "I am pleased to say that we overcame market weakness and an ongoing dip in volumes in North America, and continued to grow and gain market share while increasing operating income.
"Raw material costs continue to be a source of concern. During the second quarter raw-material costs continued to increase, and we expect the full-year figure to rise by an estimated $298 million. This would amount to a $1.2 billion increase in our raw material costs since 2004."
Straberg added, "I have repeatedly stressed that this huge transition at Electrolux — as we introduce new, innovative products and shift much of our production capacity to low-cost countries — may distort results in any one quarter. However, I remain convinced that we will succeed in raising our operating margin to the industry average through our strategy of developing new, innovative products, continued brand-building, profitable growth and cost savings."
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