April 26, 2010 / 10:29 AM / 9 years ago

UPDATE 4-Whirlpool sees strong 2010; shares soar

* Q1 EPS ex-items $2.51 vs Street’s $1.33

* Q1 sales up 20 pct at $4.27 billion, beat Street view

* Raises FY shr view to $8.00 to $8.50 from $6.50 to $7.00

* Shares up more than 13 pct (Adds comments from conference call, analysts)

By Dhanya Skariachan

NEW YORK, April 26 (Reuters) - No.1 appliance maker Whirlpool’s (WHR.N) quarterly profit and full-year forecast trumped Wall Street estimates on strong sales in Brazil, Asia and North America, boosting its shares to an all-time high.

The news also propped up shares of rival Electrolux (ELUXb.ST), which is due to report earnings on Tuesday.

Whirlpool, the maker of Maytag and KitchenAid appliances, has benefited from its presence in fast-growing Latin American and Asian markets, fueled by the purchasing power of a growing middle class.

A sluggish economy and weak housing market had dented sales in North America, its top market. But the company is profiting from signs of a U.S. recovery and demand for energy efficient products, helped by a federal stimulus program.

“While there is still some degree of uncertainty in many facets of the global economy, we continue to expect growth throughout this year in almost all the markets around the world,” Chief Executive Officer Jeff Fettig said on a call.

In addition to a pick-up in demand for appliances, Whirlpool said it won many new home builder contracts in the first quarter and expects to be “very well positioned” to benefit from any improvement in the home construction front.

“The company is taking share on the contractor side,” Goldman Sachs analyst Joshua Pollard said in a note to clients, adding that Whirlpool’s outlook was conservative.

Whirlpool sees full-year 2010 U.S. industry unit shipments up 3 percent to 5 percent, up from its prior outlook of a 2 percent to 4 percent rise.

First-quarter net income rose to $164 million, or $2.13 a share, from $68 million, or 91 cents a share, a year ago. Excluding items, it earned $2.51 a share, beating the analysts’ average estimate of $1.33, according to Thomson Reuters I/B/E/S.

For 2010, Whirlpool forecast earnings at $8 to $8.50 a share, up from its prior outlook of $6.50 to $7.00. Analysts had forecast earnings of $7.08 a share.

Whirlpool’s sales rose about 20 percent to $4.27 billion, while analysts expected $3.79 billion. Sales in North America rose 7 percent to $2.3 billion, while unit shipments there rose 11 percent.

Sales rose 65 percent in Latin America and increased 60 percent in Asia. For the full year, the company now expects its shipments to rise about 10 percent in Brazil and 5 percent to 8 percent in Asia.

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Graphic on Whirlpool earnings link.reuters.com/sap49j

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COST CUTS A DEFENSE AS COMMODITIES RISE

Caterpillar Inc (CAT.N), the world’s largest maker of earth-moving equipment, also reported a higher-than-expected quarterly profit on Monday and raised its full-year forecast. [ID:nN26212283]

Whirlpool, which was helped by a rising demand for energy-efficient dishwashers and refrigerators in the first quarter, is planning to launch several new energy-efficient appliances in the back half of the year.

But it warned investors that costs of raw materials could be at the high end of its previous forecast range of $200 million to $300 million.

Wall Street Strategies analyst Brian Sozzi said the profit outlook was “realistic” and applauded Whirlpool’s cost-cutting efforts, adding they should give the company an edge over rivals even when commodity costs go up later this year.

“Even with higher input costs, they still have visibility into a further ... reasonable strength in the topline and also more productivity coming up from their model,” Sozzi said.

He has a “buy” rating on the stock, which he believes has more room to grow at current valuation levels.

The company has shut plants, cut jobs and moved some manufacturing to low cost-centers like Mexico. It has also started using common parts across its portfolio of dishwashers, refrigerators and washing machines.

Whirlpool shares were up more than 13 percent at $115.78 at midday on Monday and touched a high of $118.44 earlier in the session. (Reporting by Dhanya Skariachan; Additional reporting by James B. Kelleher in Chicago, Editing by Lisa Von Ahn, Derek Caney and Gunna Dickson)

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