STOCKHOLM--Swedish white goods giant Electrolux AB (ELUX-B.SK)
Friday said the market situation in Europe is likely to get worse
before it gets better as strong volume growth in North and Latin
America boosted its fourth-quarter profits.
Electrolux--the world's No. 2 maker of home appliances after
U.S. rival Whirlpool Corp. (WHR), said market demand for core
appliances in Europe is expected to decline this year, while demand
in North America is expected to increase.
"In 2013, we believe that the weak market in Europe will be
offset by growth in North America and the emerging markets," Chief
Executive Keith McLoughlin said in a statement.
During the past year the maker of AEG and Frigidaire washing
machines and refrigerators has enjoyed earnings growth helped by
easing raw material costs, price hikes and cost savings programs.
The momentum has come even as consumers in many of Electrolux's key
markets continue to wrestle with unemployment and other economic
concerns.
While Europe remained weak during the quarter, Electrolux said
it has increased its exposure to emerging markets, which now
represent more than 35% of sales. The group expects this figure to
reach 50% within five years.
Key rival Whirlpool Thursday reported a 40% drop in
fourth-quarter profit as the home appliances company was bogged
down by one-time charges, although core earnings improved sharply
and came in above Wall Street estimates. The Michigan-based company
sees industry unit shipments to 2%-3% higher in the U.S. in
2013.
Electrolux earned a net profit of SEK291 million ($45.9 million)
for the three months ending 31 Dec. 2012, compared with a profit of
SEK220 million for the same period in 2011. The average forecast in
a Dow Jones Newswires/Factset survey of eight analysts was for a
net profit of SEK394.6 million.
The Stockholm-based company posted revenue of SEK29.19 billion,
up from SEK28.37 billion a year ago and against expectations for
SEK28.36 billion. Operating profit excluding items affecting
comparability was SEK1.63 billion, compared with SEK616 million a
year earlier and lower than the SEK1.71 billion analysts expected.
As previously communicated Electrolux booked a SEK1.0 billion
one-off charge in the fourth quarter.
The board proposed an unchanged dividend of SEK6.50 per share
for 2012.
Shares Thursday closed at SEK168.00, valuing the company at
SEK51.90 billion.
Write to Katarina Gustafsson at
katarina.gustafsson@dowjones.com; Twitter: @DowJonesNordics
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