Electrolux warns on higher steel prices

CBS MarketWatch: “Shares fell 6.7 percent after the Swedish vacuum cleaner maker said the higher costs would result in operating income for 2004 being ‘somewhat lower’ than previously forecast.

Electrolux said price increases on steel were of a ‘magnitude we have not seen before’.

The company, which also makes refrigerators, washing machines and chain saws, said a second half increase of SEK1.2 billion ($160 million) in material and component costs would hit second half operating income by around SEK500 million.

It said the increased costs should in part be offset to the tune of SEK700 million by improved efficiency and increased purchasing in countries with lower cost bases.

‘Material prices have showed continued strong increases and it is no longer possible to offset these by internal measures,’ chief executive Hans Straberg said. “

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