Cost cuts help Whirlpool post surprise profit
BANGALORE (Reuters) - Whirlpool Corp (WHR.N) reported a surprise quarterly profit on Monday as cost-cutting efforts helped the world's biggest appliance maker weather a slump in global sales, and it backed its 2009 profit forecast.
Shares of the maker of Maytag and KitchenAid appliances rose as much as 20 percent on the news, making the stock one of the top percentage gainers on the New York Stock Exchange.
The results came a week after Whirlpool's largest rival, Sweden's Electrolux (ELUXb.ST), also reported an unexpected first-quarter profit on tough cost-saving measures.
"Our efforts during the quarter to reduce headcount and decrease spending in most areas are yielding very good results," Whirlpool Chief Executive Jeff Fettig said on a call with analysts.
Whirlpool, which has been in talks with banks about renewing credit lines, has frozen salaries, reduced its contribution to retirement plans and taken other steps to cut costs.
In April, the company announced plans to close its washing machine factory in Shanghai to consolidate its Chinese operations.
Whirlpool, which ceased production at a Mississippi plant this month and plans to close a facility in Tennessee in August, expects to reduce capital spending by at least 10 percent for the full year.
LACKLUSTER SALES
Whirlpool, whose products also include refrigerators, freezers, dishwashers and dryers, has seen sales crumble during the global slowdown. It had warned earlier in the year that profits would continue to fall in 2009.
"From a topline perspective, we saw significant weakness across most major markets during the first quarter with the exception of Brazil, India, and China, where demand was relatively stable," Chief Financial Officer Roy Templin said.
Whirlpool, whose brands include Jenn-Air, Amana, Brastemp, Consul and Bauknechtand, reported first-quarter earnings of $68 million, or 91 cents a share, down from $94 million, or $1.22 a share, a year earlier.
Adjusted for one-time items, profit came to 59 cents a share, while analysts on average were expecting a loss of 18 cents, according to Reuters Estimates.
Sales at the Benton Harbor, Michigan-based company fell 23 percent to $3.6 billion.
CONSUMERS DELAY PURCHASES IN SLUMP
On a conference call, Whirlpool said it saw a somewhat more challenging market than it previously had expected for the second quarter and rest of the year. Continued...
