By Dominic Chopping
STOCKHOLM--Electrolux expects demand in its major markets to stabilize this year but underlying earnings aren't likely to improve sequentially in the first quarter as it will take time for its cost-saving plan to have an impact.
The company had cautioned that fourth-quarter earnings would be weighed by a 1.4 billion Swedish kronor ($134.8 million) loss in its North America business, driven by price pressure, lower volumes and elevated cost levels related to its cooking-manufacturing transition. The overall net negative impact from one-off items in the quarter was SEK2.49 billion.
Electrolux is working through a restructuring that is expected to see net cost savings of SEK10 billion to SEK11 billion and it said this will primarily contribute to earnings during the second half of 2024.
In light of the Red Sea situation, there is however a degree of uncertainty related to ocean freight costs, it added.
The Swedish home-appliance manufacturer posted a fourth-quarter net loss of SEK4.11 billion from a loss of SEK1.92 billion in the same period a year prior, as sales fell 0.4% to SEK35.64 billion.
A FactSet analyst poll had expected a net loss of SEK2.9 billion.
"Looking into the beginning of 2024, weak consumer sentiment is anticipated to continue with consumers shifting to lower price points and postponing purchases in discretionary categories," Chief Executive Jonas Samuelson said.
Write to Dominic Chopping at dominic.chopping@wsj.com
