Electrolux profit beats estimates amid ‘healthy’ U.S. growth

Alan Shaw is CEO of Electrolux’s North American unit, which is headquartered in Charlotte
Alan Shaw is CEO of Electrolux’s North American unit, which is headquartered in Charlotte Courtesy of Electrolux

Electrolux AB, Europe’s biggest maker of home appliances which has its North American headquarters in Charlotte, reported first-quarter profit that beat analysts’ estimates and increased its forecast for growth in the U.S.

Operating profit increased to 1.27 billion kronor ($157 million) from 516 million kronor in the year-ago period, which was burdened by a loss in Electrolux’s North American business, the Swedish company said Thursday. The average of analyst estimates compiled by Bloomberg was 1.05 billion kronor. The stock climbed as much as 10 percent.

“We have had a very strong focus in recent years on built-in kitchens under Electrolux and AEG brands, as well as premium products within laundry and drying,” Chief Executive Officer Jonas Samuelson said in a phone interview. “Those are very fruitful innovation areas, where we see continued opportunities.”

Volume growth in the U.S. market for appliances remained healthy, and increased by 8 percent in the first quarter, Samuelson said.

Electrolux expects the U.S. market for home appliances to grow by 4 percent to 5 percent this year, raising its previous forecast of 3 to 4 percent. It still expects the Western European market to expand by 2 to 3 percent.

Samuelson took over the CEO position in February from Keith McLoughlin, whose attempt at buying General Electric Co.’s appliances unit for $3.3 billion fell apart following resistance from the U.S. Department of Justice.

The unit was later sold to China’s Qingdao Haier Co. for $5.4 billion, potentially bringing a more aggressive competitor into the U.S. appliances market.

After the GE deal fell apart, Electrolux canceled plans for an $85 million expansion in Charlotte that would have nearly doubled its local workforce. The company has said, however, that its North American headquarters will remain in Charlotte.

After McLoughlin retired Feb. 1, Alan Shaw stepped in to head Electrolux’s North American unit. McLoughlin had acted as interim CEO of the unit since last April, when Jack Truong resigned from the position on the same day the company warned of lower-than-expected earnings.

Electrolux has about 850 employees and contractors in Charlotte.