(Reuters) - Home appliance manufacturer Whirlpool Corp (WHR.N), an early supporter of tariffs to protect U.S. washing machines, said on Tuesday that U.S. tariffs on steel and aluminum were raising sharply the costs of raw materials, contributing to a slump in second-quarter earnings, and shares fell 15 percent to a two-year low.
The Benton Harbor, Michigan-based washing machine maker could be forced to modify its current business practices, it said in a quarterly filing, without giving details.
Chief Executive Marc Bitzer told investors on a call on Tuesday that rising costs in raw materials, unit volume decline and foreign currency volatility were factors in a slump in second-quarter earnings.
On Monday, Whirlpool reported second-quarter profit after market close that fell short of Wall Street estimates. The company posted a net earnings loss of $657 million, or $9.50 cents per diluted share, in the quarter that ended in June, compared with $189 million, or $2.52 per share, a year earlier.
The Trump administration slapped tariffs on imported washing machines earlier this year, which was expected to give Whirlpool a boost.
Bitzer praised the tariffs on washing machines in January but struck a more cautious tone in April, saying the company’s raw materials costs in its U.S. laundry business had risen substantially primarily due to a separate set of tariffs on steel and aluminum.
On Tuesday he said that “uncertainty related to tariffs and global trade actions have also led to increased cost of certain strategic components and finished goods import and export.”
The company increased prices on its kitchen and laundry appliances earlier this year in response to rising costs.
Whirlpool competitor LG Electronics Inc (066570.KS) also hiked prices on washing machines in March as a result of the tariffs.
Whirlpool shares fell 15 percent on Tuesday to $128.82 on the New York Stock Exchange.
Analysts at Credit Suisse lowered the price target on Whirlpool to $175 from $195 after the earnings report.
Reporting by Caroline Hroncich; Editing by Alistair Bell and Lisa Shumaker