(This Oct. 27 story has been corrected to read divesting, not shutting down, in paragraph 15)
By Marie Mannes and Louise Rasmussen
STOCKHOLM (Reuters) - Shares in Electrolux sank to their lowest in more than a decade on Friday as quarterly core profits were far below expectations, while the company vowed more cost cutting to tackle weak demand and pricing pressure from peers.
Cash-strapped consumers and Electrolux's high costs are posing a challenge for the No. 2 world's home appliance maker.
Its shares fell as much as 13% in early trade to their lowest since January 2012. They were down 12.6% at 1056 GMT.
For the quarter, Electrolux ended up selling at lower prices than a year earlier including products ranging from fridges to coffee machines, and the company said it expects that trend to continue in the fourth quarter.
The company's previously planned savings program had started to yield fruit but not enough, said Chief Executive Jonas Samuelson.
"The challenging market environment, with demand mainly driven by forced replacements, consumers shifting to lower price points and high promotional activity, offset most of the 2.4 billion Swedish crowns cost savings," Samuelson said.
Its adjusted operating result swung to a profit of 314 million Swedish crowns ($28.10 million) from a year-ago loss of 35 million but that was well below the 682 million expected by Kepler Chevreux analyst Johan Eliason.
Electrolux has struggled to compete with rivals such as China's Midea which sell at lower prices. The world's No. 1 white goods maker Whirlpool lowered its full-year guidance on Wednesday, hit from lower consumer spending in North and South America.
Both are under pressure to cut prices.
JPMorgan (NYSE:JPM) said the underlying operating income was 50% below consensus, describing as "worrying" the fact that Electrolux was not expecting further improvements in fourth-quarter profit.
"This raises questions on how much of the additional savings will flow through to the bottom line, given the challenging industry backdrop," it added.
The company said it would reduce net costs with measures such as further streamlining of operations and layoffs.
Electrolux, with products priced at the premium end of the market in many regions, said the restructuring would mean it would focus on medium to premium ranges in its three main brands, and would cut 3,000 jobs.
The changes will result in a restructuring charge in the fourth quarter of 2 billion to 2.5 billion crowns, it said.
The company's previous restructuring program was focused on North America, besides divesting a factory in Hungary and production facilities in Egypt for Zanussi-branded major appliances.
Electrolux also divested plants producing water heaters in Egypt and South Africa.
($1 = 11.1724 Swedish crowns)