Electrolux's Earnings Decline
Electrolux reported first-quarter earnings fell 29 percent compared to last year. Company officials blame North American operations for the bulk of the Swedish-based company’s earnings’ decline.
Sales of company appliances, such as microwave ovens and room air conditioners are up slightly in North America, but President and CEO Keith McLoughlin said other factors in the region are hurting profits.
“Our earnings were negatively impacted by the major transition required to meet the new energy standards within cold categories,” McLoughlin said. “The ramp up of the cooking plant in Memphis also impacted earnings negatively.”
Electrolux’s home-cooking appliance manufacturing plant opened in Memphis at the end of 2013 and company officials say it is not performing as expected.
The new federal energy rules McLoughlin referred to kicked in last year. They required Electrolux to redesign its refrigerators and freezers, the company’s dominant products, to make them more efficient. The company blames a 20 percent decline in earnings last year mainly on the new regulations.
Electrolux moved its North American headquarters to Charlotte five years ago. The company predicts an upturn in earnings by year’s end.