Electrolux is the latest consumer company to warn that weak demand in Europe and the US will hurt second-half earnings. It also blamed rising raw materials costs.
Electrolux, which is the world’s second largest maker of appliances like fridges and cookers, posted worse-than-expected second-quarter results along with that gloomy forecast.
Its shares dropped 13 percent to their lowest in two years.
“It is a weak economic macro environment and appliance demand is directly connected to consumer confidence and discretionary income,” Electrolux Chief Executive Keith McLoughlin said.
He revealed that demand in the US market fell 10 percent in the quarter. Important European markets like Spain and Italy were also sharply lower, hit by austerity and debt worries, he added.
Electrolux reported core earnings of 745 million crowns (80.8 million euros) versus 911 million crowns forecast in a Reuters poll of analysts and 1.5 billion crowns a year ago.
That followed a surprise loss for on Monday for Philips, Europe’s largest maker of consumer electronics. The Electrolux warning does not bode well for its larger rival, Whirlpool, the appliances world number one, which reports on July 21.