Stockholm, Sweden — Global sales gains and cost-cutting initiatives helped swing Electrolux back to profitability in the fourth quarter.
Net income was 970 million kronor for the three months, ended Dec. 31, compared with a year-ago loss of 987 million kronor, and net sales rose 9 percent to 31.4 billion kronor.
In the U.S., sales rose 3 percent to 8.9 billion kronor, blunted by weak demand for core categories including freezers and room air, although a greater mix of higher-margin products helped compensate for lower volumes and moderate pricing pressure.
But U.S. operating margin fell from 6 percent last year to 1.5 percent during the quarter, and operating income declined 70 percent to 134 million kronor due to a costly refrigeration retool in advance of tighter Department of Energy efficiency requirements, and the start-up of a new cooking plant in Memphis, Tenn.
Nevertheless, a 10-year program of moving manufacturing to low-cost countries, along with sales gains, cost reductions and increased production efficiencies, made 2014 “a good year for Electrolux,” president/CEO Keith McLoughlin said, with net sales up 3 percent 112.1 billion kronor and net earnings up 234 percent to 2.2 billion kronor for the 12 months.
Looking ahead, McLoughlin projected U.S. majap industry increases of 3 percent to 5 percent for 2015, and said the company – the second-largest majap maker in revenue behind Whirlpool – is on track to complete its $3.3 billion acquisition of GE Appliances this year, giving it combined annual sales of about $22.5 billion.