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European recovery on track for Electrolux in second quarter
July 18, 2014 / 6:16 AM / 3 years ago

European recovery on track for Electrolux in second quarter

STOCKHOLM (Reuters) - World number two home appliances maker Electrolux said recovery in Europe remained on track as it posted slightly better than expected second-quarter profit and stuck to forecasts for growth in its home region and the United States.

An Electrolux logo is seen at a factory in Porcia, northern Italy, February 28, 2014. REUTERS/Stefano Rellandini

After years of gloom in Europe, which makes up about a third of major appliance sales for Electrolux, demand started to pick up earlier this year and cost cuts and a focus on premium products has also started to feed into earnings.

“A positive impact from the ongoing cost-reduction program in Europe, combined with an improved product mix in such areas as built-in kitchen products, led to a significant improvement in our operating income in EMEA,” Electrolux CEO Keith McLoughlin said in a statement.

But the recovery in Europe remains patchy with growth picking up in the Iberian countries and Britain in the second quarter while weaker development was seen in France and the Nordic countries.

Electrolux, which sells under brands such as Frigidaire, AEG and Zanussi as well as its own name, also saw a continued slowdown in Latin America and said it had cut costs and raised prices there during the period to offset the pressure.

The company said visibility was low around the demand picture for Latin America in the near term, but stuck with a forecast for market growth in Europe of 1-3 percent this year and for a 4 percent expansion in the United States, which has recovered from a slow start to the year.

The Swedish firm, a smaller rival to Whirlpool, said adjusted operating earnings rose to 1.17 billion crowns ($171.17 million) from a year-ago 1.04 billion to come in above a mean forecast of 1.07 billion in a Reuters poll of analysts.

Whirlpool publishes its second quarter results on July 23.($1 = 6.8352 Swedish Crowns)

Reporting by Simon Johnson; Editing by Alistair Scrutton and Niklas Pollard

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