STOCKHOLM, SWEDEN –
Price hikes and higher sales helped push Electrolux’s first-quarter earnings up 22.7 percent to 561 million kronor.
Net sales for the three months, ended March 3,1 rose 10.4 percent to a record 25.9 billion kronor, the company reported, fueled by acquisitions as well as organic growth.
In North America, sales rose 6 percent to 7.1 billion kronor and operating income was 159 million kronor compared with a year-ago loss of 71 million kronor.
In a statement, president/CEO Keith McLaughlin acknowledged that first-quarter majap demand in North America was “somewhat weaker than we previously anticipated,” although last year’s cost increases “made a significant contribution to the improvement in first-quarter operating income.” Those, plus a further round of price hikes in February, “will be a key ingredient to improve earnings in North America during 2012,” McLaughlin said.
Looking ahead, Electrolux is projecting moderate improvement in the U.S. market by year’s end, buoyed by modest growth in the housing market. The company is also anticipating gradual improvements in its global pricing and product mix, although the cost of transportation, sourcing, marketing and raw materials are expected to rise.
McLaughlin added that the company continues to generate “solid cash flow” — attributable to ongoing structural efforts to reduce tied-up capital — which has strengthened its balance sheet and prepared it for “both the uncertainties and the opportunities we face in the period ahead.”