(Adds comments from CEO interview, details on U.S. weather
impact, updates share movement)
By James B. Kelleher
April 25 Whirlpool Corp on Friday
reported first-quarter earnings below analysts' expectations as
currency and other headwinds in Latin America and Asia offset
modest sales increases in North America and Europe.
The world's largest maker of home appliances also said
brutal winter weather in the United States not only kept
consumers out showrooms but disrupted shipments from its
factories in the Midwest, costing it between $10 million and $20
The news sent the company's shares down as much as 3.6
percent on the New York Stock Exchange, although the stock had
almost recovered by the afternoon.
Chief Executive Officer Jeff Fettig told Reuters he remained
"very bullish on the U.S. recovery" despite a slew of
disappointing reports in recent weeks on new home sales, housing
starts and building permits.
The new-housing and resale markets account for 25 percent to
30 percent of U.S. home appliance demand, according to
Fettig said that while the company's U.S. sales had suffered
in January and February because of the weather, they snapped
back in March and continued to rebound in April.
Whirlpool reported a first-quarter net profit of $160
million, or $2.02 per share, down from $252 million, or $3.12 a
share, a year earlier.
Excluding a tax credit last year and restructuring costs
this year, Whirlpool said earnings rose to $2.20 a share from
But even by that measure, the results were disappointing.
Analysts on average had expected the Benton Harbor,
Michigan-based company to report a profit of $2.33 a share,
according to Thomson Reuters I/B/E/S.
"Sales in Asia were on the underwhelming side, mirroring the
data that has been piling up from the region," said Brian Sozzi,
chief executive officer of Belus Capital Advisors.
Results from North America, while positive, were a "rude
awakening," Sozzi said, since the U.S. housing market's
stuttering recovery would force Whirlpool to spend more on
marketing to meet its sales goals.
Earlier this week, the U.S. Commerce Department said sales
of new U.S. single-family homes tumbled to an eight-month low in
March, raising concerns about the strength of the housing
recovery and increasing the uncertainty for Whirlpool in its
The company, which sells its washers and dryers, stoves, and
refrigerators under brand names including Whirlpool, Maytag,
KitchenAid and Jenn-Air, said sales rose 4.7 percent to $4.4
billion, slightly higher than the $4.3 billion analysts had
Whirlpool said sales rose 4 percent in North America and by
a similar rate in Europe.
Sales increased in Latin America and Asia, too, but higher
material costs and currency swings hurt profitability in those
regions, Whirlpool said.
The company said it expected full-year industry unit
shipments to be up 5 percent to 7 percent in North America, flat
to up 2 percent in Europe, flat in South America and flat to up
3 percent in Asia.
Fettig acknowledged sales to China had declined in the first
quarter, something "we've not seen for a while."
But he expressed confidence that the apparent slowdown was
nothing to worry about because the Chinese economy is still
expected to grow at twice the rate of most other big markets.
"There is a transition going on," Fettig said. "But I don't
think it's an unhealthy transition, and we're still making big
Whirlpool said it still expected to report full-year net
income of $11.05 to $11.55 a share and a profit of $12.00 to
$12.50, excluding items.
In afternoon New York Stock Exchange trading, Whirlpool
shares were down less than 0.1 percent at $154.57 after falling
as low as $149.10.
(Reporting by James B. Kelleher in Detroit; Editing by Lisa Von