October 25, 2018 / 1:23 PM / a year ago

Whirlpool expects to raise prices to counter higher costs

The administrative entrance at the Whirlpool plant in Clyde, Ohio, U.S. October 3, 2017. Picture taken October 3, 2017. REUTERS/Aaron Josefczyk

(Reuters) - Whirlpool Corp (WHR.N) said on Thursday it expects about $300 million in costs related to higher raw materials expenses and tariffs, and plans to counter that by raising prices and exiting some loss-making businesses.

The U.S. home appliances maker will exit its domestic sales operations in Turkey and Hotpoint-branded small appliance business in EMEA, as well as explore a sale of its South Africa operations, it said on a call discussing its third-quarter earnings report.

The company said prices of steel, a key raw material used in appliances, are expected to drop slightly in 2019.

Chief Executive Officer Marc Bitzer said demand was healthy in North America ahead of the holiday season.

“We expect ... continued recovery in the housing market, while perhaps at a slower pace, which would help ensure continued healthy demand for new appliances,” Bitzer said.

Several U.S. manufacturers, including Caterpillar Inc (CAT.N), United Technologies Corp (UTX.N) and Honeywell International Inc (HON.N), have said costs related to higher trade tariffs will pressure margins.

Whirlpool on Wednesday beat Wall Street estimates for quarterly profit, helped by its ability to counter higher tariff costs with raised prices.

The company’s shares, which have fallen about 38 percent this year, rose as much as 7.2 percent to $111.80 on Thursday, registering their biggest single-day percentage gain in more than three years.

Reporting by Rachit Vats and Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty

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