Salem Radio Network News Monday, August 15, 2022

Business

Electrolux misses profit forecast hit by supply chain, N.America loss

By Helena Soderpalm

STOCKHOLM (Reuters) -Sweden’s Electrolux missed second-quarter profit expectations on Thursday hit by supply chain problems and a loss in its North American business.

Europe’s biggest home appliances maker said it expected those supply chain constraints to ease in the second half of the year but warned of continued disruption risks ahead due to the coronavirus and war in Ukraine.

Electrolux shares, down over 30% so far this year, fell 9.6% in early trade, on track for their worst day since March 2020.

Investment bank Citi said in a note that the “substantial miss to earnings” looked set to lead to double-digit consensus downgrades for 2022.

CEO Jonas Samuelson said the supply situation looked better for the third and fourth quarters versus the preceding quarters.

“Step by step we are coming back to a more normalized supply environment,” he told analysts and journalists during a webcast.

Electrolux, whose brands include Frigidaire, said it had been able to offset higher costs for raw material and logistics in the second quarter through higher prices and expects to do so for the full year.

Second-quarter operating profit was 560 million Swedish crowns ($54.9 million) down from 1.98 billion a year earlier and well below the 981 million expected by analysts in a Refinitiv Eikon poll.

“It is truly disappointing that our North American business area reported a loss in the quarter,” Samuelson said in a statement, adding that production output and efficiency challenges, driven by supply disruptions and labour shortages, had hit earnings hard.

Electrolux North American business fell to a loss of 270 million crowns from a profit of 558 million a year earlier. Organic sales at the group rose 0.3%.

The white goods maker, a rival of U.S. Whirlpool, lowered its full-year market outlook for North America to negative from neutral, and kept its forecast for Europe at negative.

($1 = 10.2043 Swedish crowns)

(Reporting by Helena Soderpalm; editing by Niklas Pollard and Jason Neely)

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