April 28, 2016 / 6:37 AM / 2 years ago

UPDATE 1-Electrolux lifts U.S. market outlook as Q1 profit beats

* Q1 op profit SEK 1.27 bln vs forecast 975 mln

* Turnaround in N American business gives boost

* Sees U.S. appliances market up 4-5 pct in 2016

* Stands by European outlook (Adds detail, background)

STOCKHOLM, April 28 (Reuters) - Home appliance maker Electrolux reported a bigger than expected rise in first-quarter operating earnings, helped by a turnaround in its North American business, and raised its outlook for the U.S. market this year.

While still licking its wounds from its failed bid to buy General Electric’s white goods business, the maker of Frigidaire, AEG and Zanussi appliances is benefiting from decent growth in its main markets on both sides of North Atlantic.

The company, under a new CEO untainted by the GE deal failure, said it saw U.S. market demand for appliances rising 4-5 percent in 2016, up from a previous 3-4 percent range, and stood by an outlook for growth of 2-3 percent in Western Europe.

Operating earnings at the Swedish rival of U.S. Whirlpool rose to 1.27 billion crowns ($157.31 million) from a year-ago 516 million to come in ahead of a mean forecast of 975 million in a Reuters poll of analysts.

Electrolux’ U.S. operations were hit last year by a costly shift to new ranges of fridges and freezers and a ramp-up of production at its plant in Memphis, Tennessee, and recovery in sales and profitability there helped drive earnings in the first quarter.

With the door to major U.S. acquisitions shutting, CEO Jonas Samuelsson has said the company will seek to bolster its highly profitable professionals business and expand in emerging markets, taking advantage of lower prices there brought on by weak demand and financial turmoil.

U.S. rival Whirlpool this week reported lower-than-expected quarterly earnings, hit by a slump in emerging markets, above all in Latin America’s top white goods market Brazil which has been hit by recession and a tumbling currency.

“To mitigate these market conditions and currency headwinds, we continued to reduce structural costs and also increased prices,” CEO Samuelsson, the group’s former European boss, said in a statement. “We expect the Latin American market, mainly Brazil, to remain weak in 2016.” ($1 = 8.0731 Swedish crowns) (Reporting by Niklas Pollard; Editing by; Alistair Scrutton)

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