Electrolux Posts Fall in First-Quarter Profit

By Christina Zander 

STOCKHOLM--Swedish home appliance maker Electrolux on Friday reported a 21% fall in first-quarter net profit as a poor performance at the company's North American major appliances unit weighed on earnings.

The company said net profit for the three months ended March 31 fell to 339 million Swedish kronor ($39 million), compared with a profit of 431 million kronor in the same period a year earlier.

On April 8, the company issued a profit warning saying first-quarter results in its North American major appliances business would come in "significantly lower" than expected. The unit reported an operating loss of 57 million kronor for the period as a transition of the product range to new energy requirements and ramp up of a new production facility hampered performance.

The weak result in North America comes as Electrolux prepares to integrate General Electric Co.'s appliances business, which it agreed to buy last year in a $3.3 billion move that will almost double the company's U.S. footprint and put Electrolux on a par with Whirlpool, the largest appliance maker in the U.S.

Sales in the first quarter totaled 29.09 billion kronor, up 14% from 25.63 billion kronor a year earlier because of currency translations. Operating profit came in at 516 million kronor, compared with 731 million kronor in the prior-year period.

The company said demand for its products increased during the first quarter in all markets except Australia, Russia and Brazil.

Write to Christina Zander at [e-mail]

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