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Electrolux earnings fall
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July 20, 2001: 3:56 a.m. ET
World's No. 1 maker of home appliances suffers as U.S. sales fall
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LONDON (CNN) - Electrolux, the world's No. 1 household appliance maker, on Friday posted a 20 percent plunge in first-half profits as U.S. sales dropped.
The Swedish maker of products such as washing machines, refrigerators, chainsaws and lawnmowers, said profits after one-time items fell to 3.25 billion Swedish crowns ($305 million) from 4.07 billion crowns a year ago.
Net income per share declined 11 percent to 6.55 crowns from 7.35 crowns in the same period a year ago. Sales rose 9 percent to 71.12 billion crowns from 65.42 billion crowns in 2000, but margins slipped to 4.6 percent from 6.2 percent.
The company also warned that operating income for the full year, excluding items affecting comparability, will be "somewhat lower" than last year.
Appliance makers are especially susceptible to economic conditions where consumers are reluctant to splash out on big items. The slowing growth rates in the U.S. economy -- the world's biggest consumer market – have taken a bite out of earnings for many in the sector.
Electrolux said sales growth suffered as slowing U.S. demand left retailers with substantial inventories and as a cool and late spring reduced demand for outdoor products such as lawnmowers and trimmers.
U.S. shipments of core appliances declined in volume by about 6 percent in the first half, the company said.
Electrolux also suffered production problems at its lines in Anderson, South Carolina and Greenville, Michigan as they prepared to turn out a new generation of refrigerators.
Electrolux said the $200 million being invested in the new products is its largest in recent years.
"We expect no improvement of market conditions in the United States during the second half of the year," the company said. "There is also a risk of further softening of demand in Europe."
Electrolux announced on February 9 that it was cutting 2,000 jobs in Europe and the U.S. to counter the effects of the slowdown.
Electrolux shares opened down about 4 percent at 143 crowns in Stockholm trading. 
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