Electrolux AB (ELUXB), the world’s second- biggest appliance maker, reported quarterly profit and sales that beat analysts’ estimates after it succeeded in pushing through higher prices in North America.
Second-quarter net income rose to 761 million kronor ($110 million) from 561 million kronor a year earlier, Stockholm-based Electrolux said in a statement today. Twelve analysts on average estimated a profit of 604 million kronor in a Bloomberg survey. Sales climbed 15 percent to 27.8 billion kronor, topping the average estimate of 26.6 billion kronor.
“North America, where price increases came through more than expected, impressed on the margin side,” said Johan Dahl, an analyst at Erik Penser Bankaktiebolag in Stockholm who recommends that investors buy Electrolux’s shares. “Europe, where Electrolux is growing more than the overall market impressed as well.”
The maker of Frigidaire refrigerators and AEG vacuum cleaners has suffered from the decline in consumer confidence in mature markets and high raw-material costs, leading it to push for higher prices in North America and Europe this year and plans to close plants in the regions.
Electrolux’s operating income for its North American major appliance business more than tripled to 512 million kronor from 138 million kronor, and the operating margin in the region rose to 6 percent from 1.8 percent. The operating margin for Europe, Middle East and Africa rose to 2.6 percent from 2 percent.
“As we go forward, we expect the North American appliance market to show modest growth as the housing market gradually recovers,” Chief Executive Officer Keith McLoughlin said in a separate release. “Higher sales prices in North America had a positive impact on operating income,” the company said.
Electrolux, which has about 50 factories, will close several in North America and Europe, McLoughlin, an American who took over at the start of 2011, said in February. The company, which competes with Benton Harbor, Michigan-based Whirlpool Corp. (WHR:US), today reiterated its forecast that its raw material costs will increase by no more than 500 million kronor this year. Whirlpool, the world’s biggest appliance maker, is scheduled to report earnings on July 24.
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