Electrolux profit lags expectations in challenging markets, shares down 10%
Writes through, adding share price reaction and detail throughout
STOCKHOLM, Oct 25 (Reuters) -Electrolux ELUXb.ST, the world's second-biggest appliances maker, reported lower than expected third-quarter adjusted operating profit on Friday, sending its shares down 10%
The Swedish company has begun delivering quarterly profit again as its North American arm has picked up after years of holding back group earnings owing to high costs, competition from market leader Whirlpool WHR.N and underperformance at its U.S. factories.
However, Electrolux is also contending with competition from lower-priced rivals, such as China's Midea 000333.SZ, which have proved increasingly attractive to consumers squeezed by high interest rates.
"While market conditions remained challenging in Europe and North America, we continued to make progress on our cost initiatives," said CEO Jonas Samuelson, who is due to retire at the end of the year.
"The market in Europe continued to be predominantly replacement driven and was relatively stable, with high promotional intensity."
The company reiterated that weak price expectations and other factors are expected to have a negative impact on the fourth quarter.
"Headwinds from currencies have increased during the course of 2024 and, coupled with a reduction in raw material costs during the fourth quarter 2023 comparison period, we expect external factors to be negative in the fourth quarter of 2024," it said.
Shares in Electrolux fell 10% in early trade, taking their decline this year to 14%.
Operating profit excluding non-recurring items rose to 717 million crowns ($67.8 million) from 314 million crowns a year earlier, against an 855 million crown mean forecast in an LSEG poll of analysts of 855 million.
Including one-off costs, operating profit fell to 349 million crowns from 608 million crowns.
($1 = 10.5704 Swedish crowns)
Reporting by Marie Mannes
Editing by Anna Ringstrom and David Goodman
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