- Economic crisis - layoffs - Sweden
Despite growing profits, Electrolux will close two US plants
The Swedish appliance maker Electrolux has announced it is going to close two plants in the United States. The company has also reported a 92 percent rise in profits for the third quarter.
AFP - Swedish appliance maker Electrolux announced on Monday better-than-expected third quarter results but said it would also close two US factories in a continued cost-cutting drive.
Electrolux, which on Friday announced the closure of a Spanish plant with the loss of 450 jobs, said it would shutter two washing machine factories in Iowa which employ 950.
It said it earned in the three months to September a net profit of 1.63 billion kronor (160 million euros, 240 million dollars), up 92 percent from a year earlier on the back of low raw material costs and previous cost-cutting measures.
Analysts surveyed by Dow Jones Newswires had forecast third quarter net profit at 782 million kronor.
"Almost everything went our way this quarter. (A) cyclical trough in commodity prices and maintained prices have been decisive for our earnings improvement. Other contributing factors are a better product mix and significant cost reductions," said the company, ranked as the world's second largest home appliance manufacturer.
At the same time, it cautioned that "demand continues to be weak, although the rate of decline has slowed down."
Electrolux, after carrying out several reorganisations in recent years in a bid to cut costs, announced the elimination of 3,000 jobs in December in response to the global economic slowdown.