Stockholm: Swedish appliance maker Electrolux AB on Monday said its net profit rose by 56% in the second quarter despite weaker sales as cost-saving initiatives started to bear fruit.
The company, based in Stockholm, said net profit totaled 1.03 billion Swedish kronor ($140 million), up from 658 million kronor in the same period a year ago.
Sales fell 1% to 27.3 billion from 27.5 billion a year earlier, weighed down by changes in currency exchange rates. Sales in comparable currencies increased by about 3%.
The figures were weaker than analysts had expected and shares fell by 4.9% to 158.8 kronor ($21.6) in early Stockholm trading.
Electrolux, which makes refrigerators and vacuum cleaners, said previous restructuring and cost-saving programs, higher sales volumes and product mix improvements had a positive effect on income, while higher raw material costs and increased marketing expenditures weighed on profits.
“All business areas show improved profitability. We are selling more advanced products and are step by step improving our position in the important premium segment,” chief executive Hans Straberg said in a statement.
He also repeated his forecast that 2010 “could be the year” Electrolux reaches its goal of an operating margin of 6 percent.
Electrolux said all its main markets continued to recover during the second quarter. It said the US market rose for the third consecutive quarter following thirteen quarters of decline.
In Europe, the overall market stabilized during the period and markets such as Germany, France and Sweden showed positive trends. However, the company said the southern European market weakened “substantially” at the end of the quarter.