Electrolux shares lit up by smaller than expected loss
By Marie Mannes
STOCKHOLM (Reuters) -Electrolux, Europe's biggest home appliances maker, reported a smaller than expected operating loss for the first quarter, boosting hopes a turnaround in North America may be taking hold and sending its shares sharply higher on Friday.
The Swedish company, which sells appliances under brands such as Frigidaire as well as its own name, said it made an operating loss of 256 million Swedish crowns ($24.85 million).
While that was down sharply from a profit of 1.58 billion crowns a year earlier, it was ahead of analysts' consensus forecast for a loss of 568 million crowns, according to Kepler.
Against a backdrop of soaring inflation, demand for appliances has faltered recently, adding more headaches for Electrolux which has been struggling with production bottlenecks and rising costs.
However, Handelsbanken analyst Karri Rinta said all regions performed better than expected in the first quarter, except in the Asia-Pacific, Middle East and Africa region (APAC).
"The most encouraging is that the losses in North America reduced clearly from the levels that we saw in the fourth quarter and in the third quarter," Rinta said.
Electrolux shares were up around 7% in early trading.
The company has struggled for years to make its North America division profitable. Despite heavy investment, its plants in the region have struggled to fully ramp up production due to supply chain constraints and high raw material costs.
In contrast, rival Whirlpool unveiled results this week that were boosted by high demand in North America.
Electrolux in September axed its North America head, replacing him with its former head of Latin America Ricardo Cons, and launched a new turnaround programme for the region alongside a company-wide cost reduction programme.
The company maintained all of its previous guidance, which included a forecast for negative full-year demand for all of its markets except in APAC, which was seen roughly flat.
(Reporting by Marie Mannes Editing by Niklas Pollard and Mark Potter)