Sweden's news in English

Editions:  Europe · Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland

Electrolux earnings fall below expectations

Share this article

Electrolux earnings fall below expectations
08:44 CET+01:00
Fourth quarter results for Swedish white goods manufacturer Electrolux failed to meet expectations, as the rising cost of raw materials put additional cost pressure on the company.

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.

Get notified about breaking news on The Local

Share this article

The Local is not responsible for content posted by users.
Become a Member or sign-in to leave a comment.

From our sponsors

New Malmö museum will focus on ‘democracy and migration'

Change starts with one small step, whether it be a large or small scale project, it all requires movement. It's a logic that can be applied to starting a new national museum from scratch, especially one with an innovative theme that is going to take several years to come to fruition.