Electrolux N.A. Majaps Sales, Net Grow
By Steve Smith -- TWICE, 7/18/2006
Stockholm, Sweden — Electrolux reported a 10 percent sales gain during the second quarter and stronger operating income for major appliances in North America.
In its consumer durables, North America group, which consists mostly of major appliance sales, net sales were $1.26 billion for the quarter, ended June 30, up from $1.15 billion during the same time last year. Net income for the quarter was $52.1 million vs. $47.6 million in 2005’s second quarter. Operating margin remained the same at 4.1 percent.
Electrolux reported that industry shipments in the United States of core appliances were up 1 percent in the second quarter as compared to the same quarter in 2005. Shipments of major appliances, including room air conditioners and microwave ovens, rose by 2 percent.
Group sales rose by 10 percent in the second quarter, reflecting the benefits of price increases and improved product mix over the past year, Electrolux said. Strongest sales were in refrigerators and cooking products, “where innovation is driving a large and growing market share and good margins,” the manufacturer said.
Laundry equipment sales were boosted by demand for front-load washers. Operating income rose in line with sales and the benefits of lower unit costs at the new plant in Juarez, Mexico, as well as other cost savings in North America were offset by start-up costs in Juarez and higher costs for materials and components.
Group sales increased significantly, Electrolux said, primarily due to expanded distribution through U.S. retailers. Operating income and margin increased “significantly” due to a result of higher volumes, the company said.
Hans Straberg, president/CEO of Electrolux, said that due to “healthy demand” the company has announced price increases for the American market to compensate for increasing material costs. “An even more important point is that we are continuing to see an improved mix as a result of previous product launches.”
Straberg added that during the second quarter, “We saw that innovative products with an attractive design are taking share in the higher price segments. This strategy is being fortified by our work to strengthen the Electrolux brand around the world.”
Electrolux will collaborate with Sharp “to develop a new innovative range of midsized frost-free refrigerators. This project is part of a broader strategic collaboration within major appliances between the two companies.”
Consolidated net sales for Electrolux during the second quarter were up 4.5 percent to $3.45 billion and operating income was up 12.5 percent to $114.8 million. Operating income after financial items for the quarter was $106.5 million, up 28.4 percent.
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