STOCKHOLM–Electrolux AB on Wednesday posted a forecast-beating first-quarter net profit as customers continued to spend more on home improvements and said that, despite producing at almost full capacity, the company couldn’t fully meet the strong demand in the quarter.
The Swedish home-appliance manufacturer posted a net profit of 1.56 billion Swedish kronor ($186.4 million) in the quarter, down from SEK2.51 billion last year, as sales rose 9.2{911ea05452e114f1778c76ca86733b6032c246f8f651bb1f01d12abf04b54efb} to SEK29.03 billion. Earnings last year were boosted by a SEK2.6 billion gain from separating its professional business.
Analysts polled by FactSet had expected net profit of SEK970 million on sales of SEK27.64 billion.
Electrolux said the supply chain remained strained in many areas, especially for electronic components, certain plastics and logistics.
Price increases fully offset the headwind from external factors, and Electrolux expects that to be the case for the rest of 2021.
“We continue to expect demand for the first half of 2021 to exceed normal seasonal levels across our main markets,” said Chief Executive Jonas Samuelson.
“However, capacity and electronic component availability will remain constraining factors into the second half,” he added.
Electrolux expects market demand in 2021 to be positive in Europe, from slightly positive previously, and positive everywhere else, with the exception of Latin America where it anticipates demand to be neutral, from positive previously.
The company now sees a negative impact from raw material costs, trade tariffs, currency and labor cost inflation of SEK2.4 billion-SEK2.8 billion in 2021, from SEK1.6 billion-SEK2.0 billion before.
Write to Dominic Chopping at [email protected]
