Electrolux, the Swedish home appliances group, has had its fair share of drama over the last six months but today’s drama is a feel-good story as its shares have jumped 8 per cent in early trading after its first quarter results exceeded analysts’ expectations.
Operating profit more than doubled in the first three months of the year, to SKr1.27bn ($157.5m) year on year, helped by a “significant turnaround” at its major appliances business in North America, which had suffered a poor first quarter a year ago.
The maker of washing machines and fridges said the appliance market in Western Europe continued to grow at the start of the year and was particularly strong in countries such as the UK, Germany and Italy.
Analysts polled by Bloomberg prior to today’s results had expected first quarter operating profit to come in at SKr1.05bn.
Jonas Samuelson, president and chief executive of Electrolux, said:
The focus on increasing the operating margin of the Group will continue throughout the year, with emphasis on product cost efficiency leveraging initiatives including modularization and automation, and launches of innovative premium products delivering great consumer experiences. The strong efforts to improve financial results in the challenging Latin America region, as well as the refocus of the Small Appliances business area will also have continued high priority.
Electrolux has not had an easy couple of months. Its attempt to grab a bigger slice of the North American market through a proposed $3.3bn purchase of GE’s domestic appliances unit came to nothing in December last year after the deal was opposed by US regulators. The GE business was subsequently bought by China’s Qingdao Haier.
Keith McLoughlin, who had been the first non-Swede to head Electrolux, announced his decision to leave the company shortly after the GE deal had to be abandoned.