 Increased demand has boosted commodity prices |
Electrolux shares have tumbled after the world's largest maker of consumer electronics said profit in the second half of 2004 would miss targets. The company blamed higher steel prices for the drop in earnings, saying it expects operating profit to decline by about 500m Swedish kronor ($68m).
It said the steel price increases "are of a magnitude we have not seen before" and also will "affect consumer prices".
Shares in the group had lost 7.7% to 131.5 kronor in Stockholm by 1310 GMT.
Steel prices have almost doubled over the past year as booming economic growth in countries such as China drives demand.
Electrolux is one of Europe's biggest consumers of steel and the company estimates that costs will increase by as much as 1.2bn kronor.
It has already tried to limit outgoings by moving production to lower cost producers such as Hungary.
"I am not surprised about the profit warning, but the magnitude of it was a surprise to me," said Gustaf Lindskog, an analyst at Alfred Berg.
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