Electrolux’s (OMX: ELUX B, NASDAQ: ELUXF) CEO Keith McLoughlin said that weak demand, lower prices and increases in raw-material costs had a negative impact on second-quarter results. Demand development was particularly weak in North America, where government stimulus had caused a temporary growth spike in the beginning of 2010. Prices were also down in Western Europe and Latin America with particularly weak demand in Italy. Sales growth in Asia remained strong.
Second quarter net sales were 24 143 million SEK and earnings per share 1.97 as compared to 3.61 in Q2 of 2010. Operating margin printed at 3.1%. Cash flow was still solid positive at 1571 million SEK. The company is pushing in price hikes in key markets and cutting costs. Electrolux does not expect H2 earnings to reach the level of H2 2010 but anticipates the trend to shift positive.
Markets weren’t expecting such a bleak quarter and lacklustre guidance. The more liquid B-share is down a whopping 13.62% one and a half hours into today’s session and is trading at around 125 SEK per share handle. Full report is available here.
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