Electrolux blames Europe for fourth quarter loss

Swedish home appliance giant Electrolux blamed a weak European market on Friday for fourth-quarter losses that were wildly beyond analysts' expectations.

Electrolux blames Europe for fourth quarter loss
Quarterly figures showed a loss of 987 million kronor ($151 million), while analysts polled by Dow Jones Newswires were expecting a loss of 621 million kronor.
A year earlier, Electrolux posted a 242-million-kronor profit.
It was the first quarter the company was in the red since 2009, with a one-percent revenue decrease to 28.89 billion kronor and restructuring charges of 1.5 billion kronor.
Last October, Electrolux announced 2,000 job cuts, with a factory closure in Australia and staff cuts in Europe.
In 2013, net profits fell by 72 percent to 672 million kronor and revenue dropped by one percent to 109.15 billion kronor.
"The challenging European market and unfavourable currency development had an adverse impact," chief executive Keith McLoughlin said in a statement.
The strength of the Swedish currency had a 442-million-kronor impact on the operating income.
McLoughlin also pointed out some positive figures from the report.
"In 2013, Electrolux delivered organic sales growth of 4.5 percent, the second consecutive year ahead of our annual target of 4 percent," he said.
"Over the past two years, growth in local currencies including acquisitions was 14 percent."
For 2014, the group expects demand to be "slightly positive, with growth in North America and Asia/Pacific partly offset by a flat market in Europe and a slow-down in Brazil from the high levels seen in 2013".

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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.