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Date:	Aug 12, 2009
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Shares on the Rise as Actual Third-quarter Profit of Electrolux AB (PinkSheets: ELUXY) Doubles Expectations

Contributed by: Justice Sirikah
Date: Oct 26, 2009

“Almost everything went our way this quarter”, declared Hans Straberg, CEO and President of Electrolux AB (PinkSheets: ELUXY, ELUXY message board) at a conference call where the Swedish consumer electronics manufacturer reported that its third quarter net income came in well ahead of last year’s figures and doubled analysts estimates, triggering its shares to rally ahead of previous 52-week tops. This major milestone was a result of cost cutbacks and favourable raw material prices which served to counterbalance the weight of challenging markets, the company said.

Through a reorganization scheme that was implemented five years ago in order to reach a target of about $437 million of yearly cost savings by 2010, Electrolux put 3,000 jobs on the chopping block last year alone.

And considering the fact that the key European markets fell 11 percent this quarter, stretching its quarterly declines to eight in a role, the company also advised that it will further cut 950 jobs out of the current total of 50,000, at a cost of $92 million by the end of 2011. This will be a result of the closure of two plants in the U.S and relocation of production to Mexico.

“Innovative products, investments in the Electrolux brand and cost efficiency measures have yielded results”, reads the CEO’s statement on the results. “Market development continues to be weak as expected. Even though we see things stabilizing in North America, the European market has not yet hit bottom”, it continues. Meanwhile, the company said it expects the U.S market to bottom out, although at a slow pace, at the end of the ongoing quarter.

Net earnings at Electrolux for the July – September period catapulted to $233 million, a way above $123.6 million posted during the equivalent period of 2008. Revenues were up almost five percent to the tune of $4 billion, from $3.8 billion in the year ago quarter. Both figures of the just ended three months managed to leave analysts’ forecasts trailing at $114 million in net profit alongside overall sales of $$3.95 billion.

For this reason, ELUXY shares in the U.S soared 10 percent to a year’s highest price of $51.35, from $48.30 the day before. At the time of writing, the stock had added 4.53 percent more, trading at $50.80.