Electrolux earnings met forecast after price hikes
STOCKHOLM–Electrolux AB (ELUX-B.SK) on Thursday posted in-line second-quarter net profit as price increases fully offset higher raw-material costs, trade tariffs, currency headwinds and lower volumes.
The Swedish home-appliance manufacturer made a net profit of 1.13 billion Swedish kronor ($120.7 million), against a FactSet analyst forecast of SEK1.17 billion. Net profit last year totaled SEK517 million, weighed by SEK818 million of provisions.
Sales for the quarter rose 1.1% to SEK31.69 billion against expectations of SEK33.02 billion.
Chief Executive Jonas Samuelson said it is encouraging to see a favorable earnings impact from improved mix by selling more high-margin products while price increases continued to offset strong headwinds. But he cautioned that uncertainty on trade tariffs continues to impact visibility ahead.
Based on current levels, Electrolux now expects the negative year-on-year impact from tariffs, raw materials and currency to be between SEK1.4 billion and SEK1.6 billion in 2019, better than its earlier estimate of between SEK1.7 billion and SEK1.9 billion.
"In the first half of 2019, price has fully offset this headwind and we expect that to be the case also for 2019 as a whole," Mr. Samuelson said.
The company continues to expect slightly positive 2019 market demand for appliances in Europe and Latin America, while in North America and Australia expectations are still seen to be slightly negative.
In Southeast Asia, the 2019 market is now seen slightly positive, from positive previously.
The company is preparing to separate its professional-products business from the group, splitting into two separate companies, and Mr. Samuelson said preparations are proceeding to plan.
Write to Dominic Chopping at [email protected]; @domchopping @WSJNordics
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