Cost cuts help Whirlpool counter weak demand
(Reuters) - Whirlpool Corp (WHR.N) reported a higher-than-expected quarterly profit and gave a strong outlook for 2013 on Thursday as price increases and cost cuts helped the world's largest appliance maker counter lackluster demand in Europe and North America.
The fourth-quarter results from the maker of Maytag and KitchenAid appliances reflect a larger trend in corporate America, which has focused increasingly on keeping a tight lid on costs to stay profitable while sales are weak.
Whirlpool has benefited from cutting costs and manufacturing capacity, raising prices and adopting a string of measures to boost productivity. In recent quarters, the company decided to focus less on the lower-end appliance segment to protect margins.
"Those actions, combined with improving trends in U.S. housing and growth opportunities in emerging markets, create positive momentum going into 2013," Chief Executive Officer Jeff Fettig said in a statement.
Whirlpool, the world's largest appliance maker, said fourth-quarter net earnings had fallen to $122 million, or $1.52 a share, from $205 million, or $2.62 a share, a year earlier.
Excluding special items, Whirlpool earned $2.29 a share. Analysts on average were looking for $2.23, according to Thomson Reuters I/B/E/S.
Sales fell 2.4 percent to $4.79 billion, while analysts expected $4.88 billion.
Swedish rival Electrolux (ELUXb.ST) is due to report quarterly results on Friday
Appliance makers have struggled with tepid demand in mature markets like Europe and North America, forcing them to raise prices and rely more on still-growing markets like Latin America and Asia.
Whirlpool, whose sales rose in Latin America and Asia during the quarter, expects 2013 industry unit shipments to increase 3 percent to 5 percent in each of those markets.
Sales in North America fell about 3 percent to $2.5 billion. The company expects some improvement in that market, its largest, due to a recent housing uptick in the United States.
Based on the current economic outlook, Whirlpool said it expected industry unit shipments to rise 2 percent to 3 percent in the United States in 2013.
The company is less optimistic about Europe. It expects 2013 industry unit shipments to stay flat in Europe, the Middle East and Africa.
Whirlpool forecast full-year earnings of $9.25 to $9.75 a share, excluding restructuring charges, Brazilian tax credits and U.S. energy tax credits. Analysts on average were expecting $9.17.
(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn)