* Quarterly profit of $2.29 per share before items vs estimate $2.23
* Sales fall 2.4 percent to $4.79 billion, missing estimates
* CEO sees improving trends in U.S. housing market helping in 2013
* Sees 2013 profit of $9.25-$9.75/share vs $9.17 estimate
* Shares up 3.6 percent
By Dhanya Skariachan
Jan 31 Whirlpool Corp 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
Whirlpool, whose shares rose nearly 4 percent, has benefited from closing
manufacturing facilities in North America, moving some production to lower-cost
countries such as Mexico and using common parts across its lineup of
dishwashers, refrigerators and washing machines. It has also been focusing less
on lower-end appliances 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 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.
Swedish rival Electrolux is due to report quarterly results on
Whirlpool has done a "really good job of managing through a cyclical
downturn," Longbow Research analyst David MacGregor said, referring to the
company's efforts to eke more profit out of every dollar of sales in the past
Besides cost cuts, price increases have helped boost Whirlpool's profit, a
trend MacGregor expects to continue.
Despite the state of the economy, U.S. consumers have been willing to pay
more for eco-friendly appliances that help them reduce their electricity bills
over the long term and for devices with hi-tech features.
"It's innovation that will drive pricing," MacGregor said. "So to the extent
that companies can continue to bring new features that consumers are prepared to
pay for, then they will continue to have pricing power."
EMERGING MARKETS TO THE RESCUE
Whirlpool's net income fell to $122 million, or $1.52 a share, in the fourth
quarter, from $205 million, or $2.62 a share, a year earlier. Excluding special
items, the company earned $2.29 a share, beating the analysts' average estimate
of $2.23, according to Thomson Reuters I/B/E/S.
Sales fell 2.4 percent to $4.79 billion, while analysts expected $4.88
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 the Europe, Middle East and Africa region.
MacGregor said Whirlpool's shipment outlook for 2013 was "achievable."
Shares of Whirlpool were up 3.6 percent at $112.66 in early trading.