Whirlpool Sales, Profits Up Slightly

BENTON HARBOR — Whirlpool Corp. (NYSE: WHR) reported first quarter net income of $153 million or $2.01 a share, up from $150 million or $1.92 a share in the first quarter of 2016.

Revenue was $4.79 billion, up from $4.62 billion a year earlier.

The company said that excluding the effects of currency translation, sales rose 3 percent quarter over quarter.

“We made progress toward our goals of revenue growth and free cash flow generation, with strong growth and margin expansion in North America and Latin America,” said Jeff M. Fettig, Whirlpool chairman and CEO. “As we continue to execute our plans and work through the elevated complexity of our European integration, we remain confident in our ability to deliver both $1 billion of free cash flow and record earnings per share in 2017.”

By region, performance was as follows:

Whirlpool North America reported first-quarter net sales of $2.6 billion, up from $2.4 billion in the prior-year period. Excluding the impact of currency, sales increased 7 percent. The region reported first-quarter GAAP operating profit of $287 million, or 11.2 percent of sales, compared to $250 million, or 10.4 percent of sales, in the same prior-year period. The company continues to expect full-year 2017 industry unit shipments in the U.S. to increase by 4 to 6 percent.

Whirlpool Europe, Middle East and Africa reported first-quarter net sales of $1.0 billion, down from $1.2 billion in the prior-year period. Excluding the impact of currency, sales decreased 9 percent. The region reported a first-quarter GAAP operating loss of $17 million, or 1.7 percent of sales, compared to GAAP operating profit of $55 million, or 4.7 percent of sales, in the prior-year period. The company said the loss stemmed from integration of operations, which caused “a temporary disruption in the region’s supply chain network and product availability.” Also, there was demand weakness in the United Kingdom.
The company now expects full-year 2017 industry unit shipments in the region to be flat to up 2 percent.

Whirlpool Latin America reported first-quarter net sales of $818 million, up from $705 million in the same prior-year period. Excluding the impact of currency, sales increased 4 percent. The region reported first-quarter operating profit of $68 million, or 8.3 percent of sales, compared to $43 million, or 6.1 percent of sales, in the prior-year period, driven by favorable product price mix and cost productivity which more than offset raw material inflation. The company continues to expect full-year 2017 industry unit shipments in Brazil to be flat.

Whirlpool Asia reported first-quarter net sales of $419 million, compared to $371 million in the same prior-year period. Excluding the impact of currency, sales increased 16 percent. The region reported first-quarter GAAP operating profit of $23 million, or 5.5 percent of sales, compared to $25 million, or 6.9 percent of sales, in the same prior-year period. The company said unit volume growth was more than offset by raw material inflation and unfavorable product price mix. The company continues to expect full-year 2017 industry unit shipments to be flat to up 2 percent.

For 2017, company officials said they continue to expect to generate cash from operating activities of $1.7 billion to $1.75 billion and free cash flow of approximately $1 billion. Included in this guidance are primarily acquisition-related restructuring cash outlays of up to $165 million, legacy product warranty and liability costs of $70 million, pension contributions of $45 million, and capital spending of $700 million to $750 million.

As a result of what it called “temporary integration challenges in the EMEA region,” Whirlpool now expects 2017 net income per diluted share of $12.65 to $13.40.

Whirlpool will hold an investor day presentation at the New York Stock Exchange at 10 a.m. Eastern time Thursday, May 4. Top company executives will provide an overview of its strategy, growth opportunities and long-term financial targets. To listen in, visit https://livestream.com/ICENYSE/WhirlpoolDay and use the password  whirlpooldaymay4.

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