Shares in Electrolux AB dropped more than 8 percent Monday after the appliance maker warned that the weakening U.S. market and cost overruns in Europe raised uncertainty about its full-year outlook, according to AP. The weak guidance overshadowed the Stockholm-based company's third-quarter result _ a 73 percent growth in profits boosted by higher sales. «To me this looks like a profit warning,» said Goldman Sachs analyst James Moore, adding that he was very disappointed about the handling of the company's European product launch. Net profit for the quarter ended Sept. 30 came to 762 million kronor (US$119 million; ¤83.1 million) from 440 million kronor in the third quarter of 2006. Sales totaled 26.4 billion kronor (US$4.1 billion; ¤2.88 billion), up from 26.1 billion kronor a year ago. Electrolux, whose brands include Frigidaire refrigerators and Eureka vacuum cleaners, reiterated its outlook that operating income in 2007 is expected to be somewhat higher than in 2006. However, it said the risk for further decline in the U.S. appliance market, continued increases in the cost of raw materials and cost pressures on its European margins add uncertainty to the forecast. «Recently, market conditions in the U.S. market have weakened. We still expect raw material costs to have an adverse effect on the group's operating income in the fourth quarter,» Electrolux said. It added that its recent product launches in Europe «have incurred higher-than-anticipated costs.» Electrolux shares closed down 8.2 percent at 128.50 kronor (US$20.08; ¤14.02) on the Stockholm stock exchange. Chief Executive Hans Straberg said production costs in Europe were higher than expected, but the company was working to solve the problems. Electrolux's results were helped by strong sales in North and South America and a strong performance by the floor-care operations in Asia and the Pacific. The results excluded the former outdoor products operations, Husqvarna, which were spun off in June 2006.
