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Electrolux Q2 Profits Up 56%

7/20/2010 08:53:08 AM Eastern

Stockholm, Sweden -
Electrolux's strategy of strong brands, innovative products and low production
costs bore fruit during the second quarter.

Net sales for the
three months, ended June 30, slipped 1 percent to $3.7 billion, but net earnings
rose 56 percent to $139.4 million, including the negative impact of currency
fluctuations.

In North America,
net sales rose 1.8 percent to $1.4 billion while operating income fell 8
percent to $62 million. The decline in operating income was attributed to inventory
closeout sales as Electrolux transitioned to its new 2010 product line; to
costs associated with its move to new headquarters in Charlotte, N.C.; and to
higher raw-materials costs and marketing outlays.

Nevertheless, the
company's product mix is now more profitable in North America following the relaunch
of its Electrolux and Frigidaire brands and the termination of several
contracts to produce majaps under private label, the manufacturer said.

Also buoying
operating income was strong sales of room air conditioners due to early summer
heat waves.

The company said
the U.S. government-funded appliance-rebate programs increased market demand by
about 10 percent during the second quarter, particularly in April, marking the
third consecutive quarter of industry expansion following more than three years
of contraction.

In a statement,
president/CEO Hans Straberg said he is "especially satisfied" with the
company's performance in North America considering the extra costs incurred
during the quarter. He added that he believes "we will see continued growth in
North America in the coming years, as many American consumers need to replace
their old appliances which are beginning to reach the end of their life
cycles."

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