Electrolux earnings fall below expectations
TT/AFP/The Local · 2 Feb 2011, 09:48
Published: 02 Feb 2011 08:44 GMT+01:00
Updated: 02 Feb 2011 09:48 GMT+01:00
The company reported fourth quarter earnings of 1.71 billion kronor ($257.8 million), slightly below the forecast of 1.78 billion kronor and down from 2.02 billion kronor for the same period of 2009.
Analysts had expected Electrolux to earn 1.8 billion kronor, according to a Reuters survey.
Turnover came to 275.6 billion kronor, compared with 282.2 billion a year ago.
The board has proposed raising shareholder dividend payments to 6.50 kronor per share, compared with last year's dividend of 4.00 kronor per share.
Commenting on the report, CEO Keith McLoughlin noted that higher raw materials costs had affected results in North America and Europe.
"We expect that the costs for raw materials in 2011 will increase between 1.5 and 2 billion kronor over the previous year, with full impact as from the start of the year," he said in a statement.
Despite cost pressure in several of the company's markets, McLoughlin said he saw "very good opportunities" for the company to provide shareholders with high returns in the future.
As a way to compensate for rising costs, Electrolux plans on raising prices on products sold in North America, as well implementing "selective price increases" in Europe and other markets around the world.
Profits for the year reached 4 billion kronor, up from 2.6 billion kronor in 2009, representing "the best ever" annual results for Electrolux, according to McLoughlin.
Nonetheless, the company saw its share price plunge more than five percent
to 172.50 kronor within minutes of trading start on the Stockholm stock exchange, with observers hinting that a cautious outlook and smaller-than-expected dividend were to blame.