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Electrolux stock falls on gloomy forecast

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11:34 CET+01:00
Swedish appliances firm Electrolux reported solid 2009 profits on Wednesday. But a weak forecast pushed the company's stock into a nosedive.

The firm said in its report that it expected only a small rise in home appliance demand this year as the sector struggles to recover from the global economic crisis.

The forecast, combined with slightly lower than expected fourth quarter results, sent its shares tumbling 9.9 percent on the Stockholm Stock Exchange to 162.9 kronor, in a market down 0.4 percent shortly after trading opened.

"There are no indicators of a strong recovery in any of the group's main markets and therefore we only expect a modest improvement from the currently low level of market demand for appliances in 2010," the Swedish company said in a statement.

For 2009, the world's second largest appliance maker, reported net profit of 2.61 billion kronor ($362 million), nearly eight times the 366 million kronor it earned in 2008.

Sales meanwhile progressed four percent to 109.1 billion kronor.

For the fourth quarter of 2009 alone, Electrolux reported a return to profit with earnings of 664 million kronor compared to losses of 474 million for the same quarter in 2008.

"Some of Electrolux main markets started to show some recovery during the

fourth quarter of 2009, although compared to a very weak fourth quarter of

2008," the company said.

The maker of refrigerators, dishwashers and vacuum cleaners closed many plants in 2009 because of weakened demand and has been restructuring its business since 2004, often relocating plants to countries with lower labour costs.

It said Wednesday it had decided to shut down a cooker-making plan in Motala, Sweden, were 240 people were employed after a review.

Last year, it announced plant closures in Russia, Spain, the United States and China, affecting nearly 2,500 employees.

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