Electrolux posts record second-quarter profit

Electrolux, the world's second-largest maker of household electrical equipment, reported a record 56-percent rise in net profit for the second quarter on Monday.

Electrolux posts record second-quarter profit
Photo: Electrolux Group (file)

This is a record result for a second quarter, the company said. The outcome was slightly better than analysts had expected, while sales were little changed from the level for the same period last year.

The net outcome for the quarter was 1.03 billion kronor ($140.12 million) from 658 million kronor in the same quarter of 2009. Sales slipped by 1 percent to 27.31 billion kronor.

Analysts had expected a net outcome of 908 million kronor and sales of 27.16 billion kronor, a survey by Dow Jones Newswires showed.

“We are on track and presenting a record second-quarter result. We are on track and can today present a margin of 6.5 percent for the latest 12-month period,” said CEO Hans Stråberg.

“All business areas show improved profitability. We are selling more advanced products and are step by step improving our position in the important premium segment,” he added.

Despite “great uncertainty,” Stråberg contineus to believe that “2010 could be the year we approach our goal of an operating margin of 6 percent with continued improved capital efficiency.”

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Sweden’s Electrolux sees big US deal stopped

UPDATED: Shares in Swedish white goods giant Electrolux plummeted on Monday morning after US firm General Electric, which was poised to sell its appliance division to the Nordic firm, cancelled the agreement.

Sweden's Electrolux sees big US deal stopped
Electrolux's office in Kungsholmen, Stockholm. Photo: Fredrik Persson/TT
Electrolux, which sells brands including Frigidaire, AEG and Zanussi as well as its own name, is already the world's second-largest home appliance maker after Whirlpool.
It announced a year ago that it wanted to buy part of General Electric (GE).
But the US firm said on Monday that it has decided to cancel the agreement to sell its appliance division to the Swedish group which had offered last year to buy it for $3.3 billion.
The US Department of Justice had threatened to sue Electrolux and GE over concerns the deal would create a duopoly and hand Electrolux a US market share of some 40 percent.
Electrolux said it had made extensive efforts to obtain regulatory approval, and said it “regrets” that GE had terminated the agreement while the court procedure was still pending.
“Although we are disappointed that the acquisition will not be completed, Electrolux is confident that the Group has strong capabilities to continue to grow and develop its position as a global appliances manufacturer”, said Keith McLoughlin, President and CEO of Electrolux in a statement.
Shares in Electrolux — one of Sweden's most famous brands — initially dropped by 14 percent after the decision was announced, and remained 12 percent lower by mid-morning.
The failed deal has already cost the company millions of kronor in preparatory work and General Electric has requested a termination fee of $175 million.
GE revealed in a statement that it was still interested in selling the appliance division.
Monday's announcement took some analysts by surprise.
“I was surprised this deal was contested by the Justice Department, but then when we saw what their concern, which was the creation of duopoly in a part of the appliance market, it began not to look so good,” said Karri Rinta, an analyst with Handelsbanken Capital Markets.
“It's back to square one for Electrolux in North America. This is a deal that would have made them much stronger in the US especially against Samsung and LG,” he said.