Stockholm, Sweden
– Weaker demand, lower prices and higher raw materials costs led to a 40.2
percent decline in Electrolux’s third-quarter profits, to $128 million.
Net sales slipped
2.6 percent to $4 billion for the three months, ended Sept. 30, due in part to unfavorable
exchange rates. In comparable currencies net sales rose 1.5 percent for the
period.
In North America
net sales fell 6.1 percent to $1.1 billion but rose 2.1 percent in comparable
currencies thanks to increased AC equipment sales. Majap pricing was higher quarter
over quarter but lower than in the year-ago period.
Operating income
fell 74 percent to $16.7 million due to a greater mix of AC and low-priced products
and higher costs for raw materials, transportation and extensive promotions,
the company said.
In a statement,
president/CEO Keith McLoughlin noted that Electrolux, like many businesses, “has
been tangibly affected by the decline in consumer confidence in the mature
markets … of North America and Western Europe.” He said the company will
continue its efforts to increase efficiency, improve productivity, reduce costs
and generate strong cash flow, and that these initiatives “will start
generating a positive impact [at] an escalating pace.”
During the quarter
Electrolux elected to discontinue one production line at the manufacturer’s
Kinston, N.C., dishwasher factory, which had supplied the European market. The
plant will continue to produce dishwashers for North American, and the line’s
production will be transferred to a facility in Europe.
Looking ahead,
Electrolux is projecting a 4 percent to 5 percent decline in North American
market demand for full-year 2011, down from a previously forecast increase of 3
percent. A total of approximately 35 million appliances are expected to be sold
in North America in 2011, which is on a par with 1998 volumes and down by 25
percent from the peak year of 2005, the company said.
