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Electrolux Q2 Profits Up 56%

STOCKHOLM, SWEDEN – Electrolux’s
strategy of strong brands,
innovative products and low production
costs bore fruit during the second

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.”