Electrolux surpasses Q4 profit expectations
Home appliance maker Electrolux posted a slightly bigger than expected rise in fourth quarter core earnings on Wednesday.
Rise in the earnings was boosted by cost cuts and growing demand in both Europe and North America this year.
The company posted a net profit of 970 million Swedish kronor million kronor ($118 million) compared with a loss of 987 million kronor in the same period last year.
Sales rose 9% to 31.4 billion kronor. Operating profit was 1.40 billion kronor, compared with an operating loss of 1.2 billion kronor in the fourth quarter of 2013. Market demand in Europe was increased by 2% in the fourth quarter.
According to Chief Executive Keith McLoughlin, cost savings, combined with higher efficiency in production and active product portfolio management was a driving factor for the improvement in operating income.
He added that market demand in Europe is expected to grow by 1% to 2% in 2015 even if the development in Russia is extremely uncertain.
There was 8% increase in market demand for core appliances in North America. The demand is anticipated to grow by 3% to 5% in 2015.
Mr. McLoughlin said that earnings were negatively impacted by the major transition required to meet new energy standards which affect refrigeration and freezers. The company now expects continued impact from this transition process in the first half of 2015.
There was also a rise in demand in Australia during the fourth quarter. However, the demand continued to decline in Southeast Asia and China. Demand in Brazil and most other markets was also down.
Electrolux is also awaiting approval for its biggest ever deal, the $3.3 billion purchase of General Electric's appliances business, which the company agreed to buy last year.
The deal would double the company's US footprint and put it head-to-head with the US's largest appliance maker, Whirlpool Corp.
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