
BENTON HARBOR — The Benton Harbor-based appliance manufacturer Whirlpool Corp. (NYSE: WHR) announced today first-quarter net income of $191 million, or $2.38 a share, up from $160 million, or $2.02 per share, in the first quarter of 2014.
Net sales in the quarter were a first-quarter record $4.85 billion, up from $4.36 billion in the prior-year period, an increase of more than 11 percent. Excluding the impact of both foreign currency and Brazilian tax credits, sales increased over 23 percent, primarily driven by the acquisitions.
The company also released an “ongoing business earnings per diluted share,” reflecting net income excluding restructuring expense, a gain on cuts in employee benefits, acquisition-related costs, a charge for a pension settlement, and the resolution of an antitrust action. This figure was $2.14 a share. By this measure, Zacks Investment Research said Whirlpool fell short of a consensus stock analyst estimate of $2.49 expected earnings. Midmorning Tuesday, Whirlpool stock had fallen $17.73 a share, or 9 percent, to $180.10 a share.
“Our integration plans in Europe and China remain on track and we have taken actions to overcome recent currency movements,” said Jeff M. Fettig, chairman and CEO. “We continue to invest in our leading brand portfolio and innovative new products while adjusting to a continuing volatile global economy.”
First-quarter GAAP operating profit totaled $303 million compared to $281 million in the same prior-year period. Record first-quarter ongoing business operating profit totaled $318 million, or 6.6 percent of sales, compared to $302 million, or 6.9 percent of sales, in the same prior-year period. Ongoing business operating margins benefited from acquisition integration activities and cost and capacity-reduction initiatives, which were offset by the strengthening U.S. dollar.
For the three months ended March 31, the company reported cash flow of negative $651 million, vs. negative $456 million a year earlier. As expected, the decrease in free cash flow was primarily driven by seasonal working capital requirements associated with the acquisitions.
Whirlpool also adjusted downward its 2015 earnings guidance to reflect the impact of unfavorable currency and weakened demand in Brazil. The company now expects full-year earnings per share between $9 and $10, down from $10.75 to $11.75 previously.
Whirlpool also recently announced cost-based price increases in Latin America and Eastern Europe, which along with strong cost productivity programs are expected to deliver significant second-half 2015 margin expansion. The company expects to deliver record sales and ongoing earnings for the year.
For the full-year 2015, the company now expects to generate free cash flow of approximately $700 million. Included in this guidance are restructuring cash outlays of up to $250 million, capital spending of approximately $750 million to $800 million and U.S. pension contributions of approximately $72 million.
“Our previously outlined long-term growth strategy remains on track, and we are committed to creating significant shareholder value with our larger global platform, competitive cost structure, industry leading brands and broad product offering,” Fettig said.
Whirlpool North America reported first-quarter net sales of $2.3 billion, up slightly from the same prior-year period. Excluding the impact of currency, sales increased over 2 percent. The region reported a first-quarter operating profit of $276 million, compared to $228 million in the same prior-year period. During the first quarter of 2015, the region incurred a one-time, non-cash benefit plan curtailment gain of approximately $47 million.
Whirlpool Europe, Middle East and Africa reported first-quarter net sales of $1.3 billion compared to $700 million in the same prior-year period. The region reported first-quarter operating profit of $17 million, compared to $7 million in the same prior-year period. During the first quarter of 2015, the region incurred a one-time, non-cash pension settlement charge of approximately $12 million.
Whirlpool Latin America reported first-quarter net sales of $900 million, down from $1.2 billion in the same prior-year period. Excluding the impact of currency and BEFIEX tax credits, sales decreased approximately 11 percent. The region reported first-quarter GAAP operating profit of $59 million, compared to $123 million in the same prior-year period. During the first quarter of 2014, the company monetized $14 million of Brazilian tax credits.
Whirlpool Asia reported first-quarter net sales of $378 million compared to $166 million in the same prior-year period. The region reported a first-quarter GAAP operating profit of $24 million, compared to an operating profit of $5 million in the same prior-year period.
More at www.whirlpoolcorp.com.