Wires

UPDATE 2-Electrolux shares drop after warning of coronavirus impact

Niklas Pollard and Johannes Hellstrom

* Chinese virus outbreak could have financial impact

* Says implementing contingency plans to cushion blow

* Sees North America loss in Q1 as production issues bite

* Shares fall 6%, hit near four-month low

* Q4 profit beats forecast (Adds analyst comment, detail, share price)

STOCKHOLM, Jan 31 (Reuters) - Electrolux warned on Friday the coronavirus outbreak in China would hit its sourcing of products and components from the country, while lingering U.S. production issues would push its North American arm into a first-quarter loss.

The cautionary near-term guidance from the home appliances maker eclipsed a smaller-than-expected fall in fourth-quarter earnings, sending its shares down 6 percent by 0826 GMT to their lowest in nearly four months.

The Swedish maker of brands such as Electrolux, Frigidaire and AEG said the fast-spreading virus could have a "material financial impact" if its Chinese suppliers were further affected.

"As we are sourcing significant volumes of finished products and components from China to all our business areas, we are now implementing contingency plans to mitigate a potential extended period of supply disruptions," CEO Jonas Samuelson said.

Along with the prospect of a loss in North America and a gloomier outlook for efficiency gains this year, the supply chain uncertainty was likely to lead to lowered profit expectations for the group, Citi said in a research note.

The rival of U.S.-based Whirlpool said adjusted operating earnings fell to 960 million Swedish crowns ($101 million) from 1.67 billion, but that beat the 903 million on average expected by analysts, Refinitiv Eikon data showed.

The results excluded its Professional Products business which is due to be spun out to shareholders and listed separately in the first quarter.

The company warned in December that earnings in North America would be hit to the tune of $70 million in the fourth quarter, mainly due to the slower-than-anticipated start-up of a new refrigerator and freezer plant in Anderson, South Carolina.

"Given this situation, lower volumes and higher costs will impact earnings for the first quarter 2020 resulting in a loss for business area North America," Samuelson said.

Electrolux's North American arm accounted for just over a quarter of group sales in the final three months of last year.

During his years at the helm Samuelson has led a push towards greater efficiency and nimbler and more automated production to boost margins, and the December warning led to Electrolux shares losing a tenth of their value in a single day.

Against the backdrop of its lingering North American production issues, the company on Friday forecast roughly flat demand in the region this year, while seeing slightly firmer demand in both Europe and Asia.

Looking at 2020, Electrolux also said it expected little year-on-year impact from the combination of tariffs, material prices and currency swings that yielded a roughly 1.6 billion crown headwind last year.

($1 = 9.4970 Swedish crowns) (Reporting by Niklas Pollard and Johannes Hellstrom Editing by Jason Neely and David Holmes)