STOCKHOLM (Reuters) -Electrolux, the world’s second-biggest appliances maker, said on Friday that its fourth-quarter loss had widened from a year earlier due to high costs, intensified price competition and weak demand in North America, sending its shares lower.
The Swedish group, which is due to publish its full quarterly earnings report on Feb. 2, estimated an operating loss of around 3.2 billion crowns ($311 million) for the three months, against a year-earlier 2.0 billion loss, on roughly unchanged sales.
The result includes non-recurring items of a net negative 2.5 billion crowns, mainly restructuring costs which Electrolux in October estimated at 2 billion-2.5 billion crowns.
Electrolux said its North America division, which accounts for around a third of group sales, saw underlying losses grow to 1.4 billion crowns in the fourth quarter from 1.2 billion a year earlier.
“The main driver behind the loss in North America was intensified price pressure and weak demand during Black Friday, as well as the remainder of the year,” it said in a statement.
Electrolux, whose products occupy the premium end of the market in many regions, said market prices had fallen in particular for refrigerators and freezers, one of its key categories in North America.
The group has struggled to compete with lower-end rivals such as China’s Midea. Alongside market leader Whirlpool, it is under pressure to lower prices as cash-strapped consumers opt for cheaper goods.
Costs for a new U.S. stove factory, and the transfer of production to it from another factory, also weighed on results in North America.
Group profit is also negatively affected by a 1.2 billion crown writedown related to U.S. tax credits, Electrolux added.
Shares in the company closed 5% lower, taking a year-to-date drop to 9%.
($1 = 10.2290 Swedish crowns)
(Reporting by Anna Ringstrom, editing by Terje Solsvik, Kirsten Donovan)
