Stockholm:Electrolux, the world's second-biggest appliance maker, reported a second straight increase in quarterly profit amid improving demand in the United States and Europe.
Earnings before interest, taxes and one-time items rose 13 per cent to 1.17 billion kronor ($171 million), Stockholm-based Electrolux said yesterday, beating the 1.11 billion-kronor average of 10 analyst estimates compiled by Bloomberg. The previous quarter's four per cent gain was the first in more than a year.
Electrolux rose as much as 4.7 per cent in Stockholm trading, the most since April 25. Demand in Europe is recovering, and North America is gradually improving after years of largely stagnant sales. The company yesterday repeated its forecast for growth in both markets this year.
"The improvement in our European operations continued in the second quarter," Chief Executive Officer Keith McLoughlin said in a statement. "At the same time, the development in North America continues to show a solid trend."
The Swedish maker of AEG stoves and Frigidaire refrigerators forecasts that market demand in the US will increase by four per cent this year, with demand in Europe expected to grow by as much as three per cent.
An improved product mix, cost cutting in Europe and price increases in North America helped boost operating income in the second quarter, the company said.
The shares rose 3.7 per cent to 177.2 kronor at 9:46am, extending their gain this year to 5.7 per cent.
Electrolux's second-quarter sales declined 4.9 per cent to 26.3 billion kronor, compared with the 28.5 billion kronor analysts had estimated. The drop was mainly due to a weak market in Latin America, the company said. Currency shifts had a negative impact of 1.1 per cent, it said.
Sales in Latin America declined 26 per cent in the quarter, weighed down by a slowing economy as well as the soccer World Cup in Brazil, the company's second-biggest market. Electrolux said it has taken actions to reduce costs and increase prices during the quarter.
"Although we remain confident that Latin America will continue to grow in the medium to longer-term, visibility in the near-term is low," McLoughlin said.