Electrolux, the Swedish home-appliance manufacturer, is scheduled to announce its fourth-quarter results on Friday. Here are the key details:
Net Profit Expectations
According to a FactSet poll, Electrolux is projected to report a net loss of 2.9 billion Swedish kronor ($279 million) for the quarter. This is compared to a loss of SEK1.92 billion in the same period last year.
Sales Forecast
The company anticipates fourth-quarter sales of SEK35.6 billion, slightly lower than the SEK35.77 billion recorded in the previous year.
Share Performance
Over the past 12 months, Electrolux’s shares have experienced a decline of 34%. Currently, they are valued at approximately SEK98.18. In response to weak demand and fierce competition, the company has implemented job cuts and increased restructuring efforts. Additionally, there has been a noticeable shift in consumer preferences towards more affordable products.
Key Factors to Monitor
- The company recently disclosed that its North America business is expected to incur an underlying loss of around SEK1.4 billion. This can be attributed to intensified price pressure, lower volumes, and elevated cost levels related to its cooking manufacturing transition. Overall, non-recurring items in the fourth quarter are anticipated to have a net negative impact of approximately SEK2.5 billion, including expanded turnaround efforts and impairments.
- In the third quarter, Electrolux experienced an operating margin of 1.8%, boosted by the divestment of a factory in Hungary. However, the operating margin for the fourth quarter of 2022 declined to -5.5%.
- Electrolux has previously stated that it expects demand for core appliances in all regions, except North America, to be negative in 2023. The volume/mix in 2023 is predicted to have an adverse effect on earnings this year, although pricing may partially offset external factors. Investors will be eager to receive guidance for 2024.
