Electrolux Q1 N.A. Shipments Off 6.5%

By Jeff Malester -- TWICE, 5/9/2005

Stockholm, Sweden — Electrolux's North American shipments of major appliances, including room air conditioners and microwave ovens, declined by about 6.5 percent during the first quarter.

North American net sales of consumer durables, which includes majaps, came in at $1.02 billion in the first quarter, ended March 31, down 2.6 percent from the $1.05 billion reached in the prior-year three months. In comparable currency, North American sales rose 4.2 percent during the period.

Operating income for North American consumer durables dropped 40.4 percent in the first quarter, down to $23.9 million, from $40.1 million year-on-year. In comparable currency, the number fell 39.4 percent.

Electrolux group sales of appliances in North America showed good growth in U.S. dollars, and a slight increase in Swedish kronas. However, operating income and margin declined considerably, as a result of higher prices for materials, which were only partially offset by price increases and an improved product mix. Income also was negatively impacted by costs incurred from the ongoing transfer of production to Mexico.

First-quarter consolidated Electrolux sales decreased 2.5 percent to $4.2 billion, from $4.3 billion in the year-ago three months. The decrease is attributable to changes in exchange rates, while volume/price/mix showed a positive trend.

Operating income, excluding items affecting comparability, slid 24.9 percent to $186.2 million in the first quarter, down from a year-on-year $247.9 million. Operating income for the first quarter of this year includes $24.2 million for restructuring not classified as items affecting comparability, while operating income for the initial three months in 2004 includes items affecting comparability in the amount of $139.4 million for closing a refrigerator plant in the United States. Operating income for the first quarter of last year, including depreciation and amortization, was $108.5 million.

Consolidated net income for the first quarter decreased 27.6 percent to $121.6 million, excluding items affecting comparability, down from a year-earlier $167.9 million. Including items affecting comparability, net income for the first quarter of last year was $81 million.

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