By Niklas Pollard and Victoria Klesty

STOCKHOLM (Reuters) - World number two home appliances maker Electrolux AB (ELUXb.ST: Quote, Profile, Research) expects to make an operating loss in the first quarter, but said it stood by its full-year 2008 forecast of earnings in line with last year.

"As a consequence of the initially weak trend of the markets in North America and Europe, as well as a number of negative non-recurring items, as previously announced, we expect that operating income for the first quarter of 2008 will be somewhat negative," the company said on Tuesday.

It repeated its outlook of operating income in 2008 to in line with 2007.

"I think this looks very weak," said UBS analyst Olof Cederholm. "To keep the full-year guidance despite them making a loss in the first quarter looks unrealistic."

"It is conditional upon growing significantly during the rest of the year and that is not consistent with what we're seeing in the market right now."

Shares in the company pared earlier gains to close 4.6 percent higher at 102 crowns versus a 3.1 percent gain in the Stockholm bourse's blue chip index .

The Sweden-based maker of vacuum cleaners, washing machines, fridges and freezers said the appliances market in the United States, where the mortgage crisis has hit the economy in recent months, had been "somewhat weaker" than the company expected at the beginning of the year.

"Our estimate is that the market declined by 10 percent in February compared to the same month in 2007, which means that demand was almost 15 percent lower than in February 2006," Chief Executive Hans Straberg said in a statement.