Whirlpool, Electrolux see a rebounding Europe
CHICAGO (Reuters) - Home-appliance manufacturer Whirlpool Corp (WHR.N) and Swedish rival Electrolux AB (ELUXb.ST) forecast a strong rebound in demand from Europe, suggesting consumer confidence may be turning the corner after being battered by a debt crisis and austerity measures.
Whirlpool profit surged 75 percent in the second quarter on rising sales in all of its markets, especially Europe and the United States, where the housing recovery boosted demand for appliances.
Electrolux posted a slight drop in core earnings due in part to currency effects, but reported the first rise in total industry shipments of appliances in Europe in six quarters.
Electrolux Chief Executive Keith McLoughlin said he believed Europe's darkest days were behind it.
"While Southern Europe continues to lag, there are some positive trends in Germany, the Nordics in particular and the UK," he said in an interview with Reuters.
Electrolux's prediction of a rebound in demand for its products in Europe in 2014, and its raised forecast for U.S. sales, sent its shares up 5.3 percent in European trading.
Whirlpool's gains were led by big unit sales increases in Europe and Latin America, where revenue rose nearly 6 percent, and the United States, where revenue was up 5.1 percent.
"We are seeing, we think, sustainable, profound demand recovery in the U.S. marketplace," Jeff Fettig, Whirlpool's chairman and CEO, told analysts on a conference call. "We're very pleased with where we are."
Whirlpool, the world's largest appliance maker, raised its full-year outlook, and shares closed 8 percent higher at $128.91 on the New York Stock Exchange.
Marc Bitzer, Whirlpool's North American president, said the improving picture in the United States was driven by housing, including both new construction and existing home sales.
The company believes the uptick in consumer sentiment driving the housing rebound is sustainable, he said. "We expect continued growth as we progress throughout the year."
Investors have been nervously searching for signs of growth in the world's developed markets as China's economy has slowed in recent quarters.
Whirlpool reported second-quarter profit of $198 million, or $2.44 a share, up from $113 million or $1.43 a share in the same period last year.
Excluding items, earnings per share were $2.37. Analysts, on average, expected $2.42 a share.
Sales at the maker of Whirlpool, Maytag and KitchenAid appliances rose 5.3 percent to $4.74 billion, compared with analysts' estimates of $4.66 billion, according to Reuters data.
The company increased its full-year diluted earnings forecast to a range of $10.05 to $10.55 a share from $9.80 to $10.30.