* Q1 op profit SEK 1.54 bln vs forecast 1.33 bln
* Q1 op margin 5.3 pct vs forecast 4.6 pct
* Raises 2017 forecast for raw material costs
* Says to accelerate cost savings drive
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STOCKHOLM, April 28 Home appliance maker
Electrolux reported a bigger than expected rise in
first-quarter earnings on Friday and said it would step up
cost-trimming efforts in the face of mounting raw materials
After a robust 2016, the maker of white goods under brands
such as Electrolux, Frigidaire, AEG and Zanussi is facing
headwinds from rising metal prices even as demand for white
goods remains at decent levels.
The rival of U.S. Whirlpool Corp stuck by its
forecast for market demand to grow 2-3 percent in North America
this year as well as its 1 percent growth outlook for Europe,
its two biggest markets.
The company said operating earnings rose to 1.54 billion
Swedish crowns ($174 million) from a year-ago 1.27 billion to
come in ahead of a mean forecast of 1.33 billion in a poll of
Electrolux said steeper raw material prices were expected to
result in 1.4 billion Swedish crowns ($158 million) higher costs
in 2017, up from a previous forecast of 900 million, and flagged
further cost trimming ahead.
It said it now saw cost savings of 2.2 billion crowns this
year, up from a previous estimate of 1.6 billion, sufficient to
offset the rise in input costs for metals such as steel.
"The work to increase net cost efficiency throughout the
Group is making good progress and will, together with improved
product mix, support our target of reaching a sustainable
profitability with margins of at least 6 percent," the company
said in a statement.
The Swedish company has been focused on boosting
profitability in recent quarters under CEO Jonas Samuelson.
While like-for-like sales dipped slightly last year, it still
came far closer to reaching its long-elusive margin target.
Electrolux said its operating margin rose to 5.3 percent in
the first quarter from 4.5 percent in the year-ago period,
easily beating a 4.6 percent mean forecast.
Electrolux, which also competes with Asian firms such as LG
Electronics and Haier Group, has seen its shares
rise about 15 percent this year, in line with the STOXX Europe
personal and household goods index.
($1 = 8.8392 Swedish crowns)
(Reporting by Niklas Pollard and Johannes Hellstrom; editing by