* First quarter core op. profit 720 mln SEK vs forecast 873
* Sees further tough Europe market
* More upbeat on North America
By Patrick Lannin and Veronica Ek
STOCKHOLM, April 25 Household appliance maker
Electrolux said it hoped a recovering North American
market would drive growth this year as Europe is stuck in the
Sweden's Electrolux and bigger U.S. rival Whirlpool
have cut costs and increased their exposure to faster-growing
emerging markets to offset slowing growth in Europe and North
But U.S. demand has been picking up and Whirlpool has a
relative advantage in being more exposed to the world's biggest
economy, which accounts for half of its sales versus 30 percent
Whirlpool reported higher-than-expected quarterly profit on
Wednesday and stood by its earnings guidance for 2013
For Electrolux Chief Executive Keith McLoughlin, born in New
York and a veteran of the U.S. industry, the main headache is
Europe, where consumer caution has spread from southern states
to hitherto strong markets such as Germany and Sweden.
The company now expects waning demand for appliances in the
region this year, but growth of 3 to 5 percent in North America.
"We see improvements in the (U.S.) housing market... people
trading up a little bit more," McLoughlin told Reuters.
He saw no improvement in Europe in the first half of 2013.
"We're hopeful that we will start to see something more
positive in the second half, but we're not changing our outlook
for the year for Europe," he said in a telephone interview.
Electrolux makes machines ranging from espresso coffee
makers to cookers and owns brands including Frigidaire, AEG and
It reported core first-quarter operating profit, stripping
out one-off items, of 720 million crowns ($108.60 million), down
from 907 million in the same period of 2012 and below the mean
forecast of 873 million in a Reuters poll.
That included a 96 percent slump in earnings from major
appliances in Europe, Middle East and Africa to just 11 million
crowns from 271 million, but a rise in North American appliance
earnings to 457 million crowns from 131 million.
Investors focussed on Electrolux's North American outlook
and its stock was up 3.6 percent by 1008 GMT at 175.6 crowns.
Electrolux's guidance was similar to Whirlpool's, although
Whirlpool expected a flat rather than a declining European
market and saw North America up 2 to 3 percent.
Some analysts remained cautious.
"Whilst Electrolux is a well-run company geared into a
consumer/housing market recovery, we view the appliance industry
as the worst end-market in our coverage and in our view
Electrolux's valuation remains prohibitive," said Espirito Santo
in a research note.
According to Thomson Starmine data, Electrolux is valued at
12.3 times forward 12-month earnings, higher than Whirlpool's
11.9 times earnings.
Both stocks rose in 2012 on hopes of a market recovery, but
Whirlpool's gain was far greater. Since the start of 2012,
Whirlpool has now gained 151 percent and Electrolux 60 percent.
Electrolux's first-quarter earnings were also hit by adverse
currency movements. It blamed a strengthening of the U.S. dollar
against the Brazilian real, a dollar rise versus several
European currencies and a weakening of the British pound.