Whirlpool posts lower profit, cuts more jobs

ATLANTA (Reuters) - Whirlpool Corp (WHR.N) posted a lower quarterly profit as U.S. sales fell, and the world's biggest appliance maker said it would eliminate 7 percent of its workforce by the end of 2009 because of the weakening global economy.

The company also slashed its 2008 earnings outlook on Tuesday due to higher restructuring costs. It expects demand to soften further in Europe.

The financial crisis and fears of a deep global recession are compounding woes of appliance makers, which were already grappling with weaker U.S. demand and higher costs for oil and metals.

Sweden's Electrolux (ELUXb.ST), the second-biggest appliance maker, reported a surprise rise in third quarter profit on Monday, but said the financial crisis had led consumers to delay purchases or trade down to cheaper products.

"The global credit crisis has had a profound negative impact on what was already a weakening and very fragile global economy," Whirlpool Chief Executive Jeff Fettig said in a statement.

He added that falling home prices, rising unemployment and low consumer confidence would probably keep demand soft through the middle of 2009.

Whirlpool said the plan for 5,000 job cuts included previously announced plant closures as well as new reductions.

Net earnings in the third quarter fell 7 percent to $163 million, or $2.15 a share, from $175 million, or $2.20 a share, a year earlier.

Analysts had expected profit of $1.69 a share, according to Reuters Estimates. It was not immediately clear whether that number compared directly with what Whirlpool reported.

Sales rose 1 percent to $4.9 billion.

In North America, Whirlpool's biggest market, sales fell 7 percent to $2.7 billion, as higher materials costs led to a decline in operating profit.

Whirlpool said it expected appliance shipments in North America to fall about 10 percent in 2008, compared with a previous forecast of a 6 percent to 7 percent drop.

Sales rose 9 percent in Europe, 22 percent in Latin America and 11 percent in Asia.

Whirlpool kept its appliance shipment forecasts for Asia and Latin America unchanged, but said it now expects 2008 shipments to fall 3 percent to 4 percent in Europe, worse than its previous forecast of a 2 percent to 3 percent decline.

The Benton Harbor, Michigan, manufacturer said previously announced closures of two U.S. and two Mexico plants eliminated about 2,000 jobs.

Now it also plans to close a Jackson, Tennessee, plant that will cut about 500 jobs; pare 500 salaried posts in North America; and cut about 1,900 jobs in its international regions by the end of 2009.

Whirlpool said its job cuts would produce savings of about $275 million annually.

The company expects full-year profit of $5.75 to $6 a share, down from its previous forecast of $7 to $7.50. It said 2008 restructuring costs should be about $170 million, compared with a previous estimate of $100 million.

Whirlpool slashed its forecast for free cash flow to a range of zero to $50 million this year from an earlier outlook of up to $550 million. The company also suspended its stock buyback program.

In light trading before the market opened, Whirlpool shares rose to $50.21 from Monday's New York Stock Exchange close of $50.03.

(Editing by Lisa Von Ahn)