Sweden-based appliance maker Electrolux announced that its third-quarter profit declined by 12 percent. The company also said it would fall short of earnings expectations for all of 2004 due to rising prices for raw materials like steel and extreme competition with other white-goods manufacturers.
The company reported third-quarter earnings of 677 million kronor (approx. U.S. $93.4 million), or 2.35 kronor (approx. $0.32 cents) a share, in the July to September period, down 11.7 percent from the same period in 2003. Sales for the quarter ended Sept. 30, 2004 were down 2.6 percent to 29.5 billion kronor (approx. $4.1 billion), largely because of increased competition and tightness among buyers in Europe.
Sales in Europe were mixed, with overall results down by 1.2 percent, but with slight gains coming from Eastern Europe, the company said. In other markets, including Brazil and India, sales were up on the strength of demand for air-conditioners, but other appliances including refrigerators fell due to lower demand and rising costs of the steel. In China, operations were mixed because of restructuring and cost cutting. In North America, sales were steady, due in part to demand for chainsaws after the spate of hurricanes in Florida during September, but fell overall.
For the January to September period, the company posted a profit of 2.4 billion kronor (approx. $331.1 million), or 8.05 kronor (approx. $1.11) a share, a drop of 33 percent from the same period in 2003. Revenue for the first 9 months of 2004 was down by nearly 4 percent to 92 billion kronor (approx. $12.8 billion).
The company also announced that operating income for the full year is expected to be significantly lower than in 2003.
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