STOCKHOLM (AP) -- Swedish home appliance-maker Electrolux said Thursday saw its profits plunge 27 percent in the first quarter amid weakness in Europe, one of the manufacturer's core markets.
The world's second largest appliance maker said first quarter earnings amounted to 361 million kronor ($55 million), down from 499 million kroner a year ago.
Operating income for the period fell 21 percent to 720 million kronor, led by a 96 percent collapse in Europe, Middle East and Africa — an area that accounts for nearly 30 percent of Electrolux's business.
By contrast, operating income in North America, which also makes up 30 percent of sales, soared nearly 250 percent as the company "continued to capitalize on the positive trend in the market and increased its marketing spend to support the Electrolux and Frigidaire brands."
The company says sales for the three-month period compared to a year ago dropped 2 percent to 25.3 billion kronor.
Electrolux said it was largely able to compensate a 3 percent drop in shipments of core appliances in Western Europe with a 6 percent increase in shipments in North America.
"Market conditions in Europe continued to deteriorate throughout the quarter, which negatively impacted Electrolux sales and operating income," the statement said, adding that demand in Eastern Europe rose 2 percent driven by Russia.
Electrolux said the weak European market and seasonal inventory build-up resulted in a large negative cash flow of 3.4 billion kronor at the end of the quarter, though the company believes this will turn positive during 2013.
- Consumer Discretionary