Electrolux AB (ELUXB), the world’s second- biggest appliance maker, reported lower-than-estimated earnings after recovering North American markets and expansion in Latin America failed to counter a consumer slump in Europe.
Net income rose 32 percent to 291 million kronor ($46 million) in the fourth quarter, the Stockholm-based company said in a statement today. That missed the average 368 million-krona estimate of 11 analysts surveyed by Bloomberg.
The maker of Frigidaire refrigerators and AEG vacuum cleaners has suffered from a decline in consumer confidence in mature countries, leading it to push for higher prices in North America and Europe, expand in emerging markets and add new products. That helped the company boost existing sales by a record 7.5 percent. Electrolux is also closing or cutting back production at some plants.
“Operations in North America and Latin America, which currently account for 50 percent of total sales, showed strong sales and earnings growth, primarily attributable to a continued positive volume trend and improvements in price/mix,” Chief Executive Officer Keith McLoughlin said in today’s statement. “In 2013, we believe that the weak market in Europe will be offset by growth in North America and the emerging markets.”
Sales rose 2.9 percent to 29.2 billion kronor, driven by a 15 percent increase in sales of major appliances in North America, beating an average analyst estimate of 28.5 billion kronor.
Demand for core appliances in North America is likely to increase this year, contrasting with an expected decline in Europe, Electrolux said. The Swedish company proposed to pay a dividend to its shareholders of 6.5 kronor per share for 2012, unchanged from a year earlier.
Electrolux said in October it will close production of top- load washing machines in Revin, France. The company will also cut back operations at a refrigerator plant in Mariestad, Sweden, and a cooking products site in Schwanden, Switzerland. The actions are part of a plan announced last year to move more production to low-cost, high-growth countries. Electrolux has about 50 plants globally.
Whirlpool Corp. (WHR:US), the world’s largest appliance maker, reported higher than estimated fourth-quarter earnings yesterday, helped by cost cuts and a reduction in capacity. Sales dropped 2.4 percent to $4.8 billion.
Electrolux shares surged 55 percent in 2012, while Sweden’s OMX Stockholm 30 benchmark index gained 12 percent and Whirlpool more than doubled in value.
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