Electrolux misses profit projections due to supply chain issues and a decline in North America.
Stockholm (Reuters) -Electrolux missed second-quarter earnings projections on Thursday due to issues with its supply chain and a loss in its North American operations.
The largest European manufacturer of home appliances expects supply chain limitations to ease in the second half of the year, but warns of persistent disruption threats owing to the coronavirus and the conflict in Ukraine.
Electrolux shares, which have fallen more than 30% this year, fell 9.6 percent in premarket trading, putting them on track for their worst day since March 2020.
Citi stated in a report that the “significant profit loss” was likely to result in double-digit consensus downgrades for 2022.
The CEO, Jonas Samuelson, stated that the supply situation for the third and fourth quarters appeared to be better than for the preceding quarters.
During a webcast, he told analysts and journalists, “We are returning to a more normalised supply environment step by step.”
Electrolux, whose brands include Frigidaire, reported that it was able to balance higher raw material and logistics costs with higher prices in the second quarter and intends to do so for the entire year.
The operational profit for the second quarter was 560 million Swedish crowns ($54.9 million), down from 1.98 billion the previous year and significantly less than the 981 million analysts polled by Refinitiv Eikon expected.
“It is really disheartening that our North American business sector posted a quarterly loss,” Samuelson said in a statement, adding that manufacturing output and efficiency issues, caused by supply disruptions and labour shortages, had a significant impact on earnings.
The North American business of Electrolux posted a loss of 270 million crowns, compared to a profit of 558 million the previous year. The group’s organic revenues increased by 0.3 percent.
The white goods manufacturer, a competitor of U.S. Whirlpool (NYSE:WHR), downgraded its full-year market view for North America from neutral to negative and maintained its negative prognosis for Europe.
$1 is equal to 10.204 Swedish crowns.
