Electrolux, the world's number two home appliances maker, has warned that its full-year earnings will fall by more than previously forecast. The company's brands include AEG, Zanussi and Frigidaire as well as its own name.
'Based on the very weak market developments we have decided to decrease our forecast for the markets in North America and Europe,' chief executive Hans Straberg said. The new full-year forecast would entail an annual earnings decline of between 19% and 32%.
After spending years slashing costs to offset the effects of growing competition from low-cost rivals and surging raw material prices Electrolux now must contend with a sharp market downturn, especially in North America where the group generates roughly one third of its revenues.
North American industry shipments of core appliances have fallen nearly 10% in the first half of 2008, especially awkward for Electrolux which is in the midst of launching a new line of high-end products in the market.
