Whirlpool shares fall, rise after earnings miss, worse-than-expected outlook

BENTON HARBOR — Shares of Whirlpool Corp. rebounded 5.4 percent Tuesday after falling 3 percent Monday on an earnings miss.

The world’s largest appliance maker posted net income of $94 million or $1.30 a share in the first quarter of 2018, down from $153 million or $2.01 a share, in the first quarter of 2017.

Revenue was $4.91 billion, up from $4.78 billion a year earlier. However, the company said that without the impact of currency fluctuations, sales fell 0.7 percent. According to MarketWatch, analysts had expected earnings of $2.51 a share on revenue of $4.95 billion.

The company said it expects 2018 earnings of $12.30 to $13.30 a share, vs. analyst expectations of $13.68 a share.

The earnings decline was caused mostly by a sharp incrase in restructuring costs, which were $144 million in the first quarter vs. $46 million in the year-earlier period. The company’s income tax expense fell sharply, to $15 million, from $40 million in the year-earlier period.

CEO Marc Bitzer said in a press release: “We are pleased with the progress on our previously-announced global cost-based price increases and fixed cost reduction initiatives, which resulted in expansion of both ongoing EBIT and ongoing earnings per share. Our first-quarter results give us further confidence in our long-term value creation strategy, and we remain focused on delivering strong levels of margin expansion and improved cash conversion this year.”

Whirlpool North America reported first-quarter net sales of $2.5 billion, up from $2.4 billion in the same prior-year period. Excluding the impact of currency, sales increased 2.5 percent. The region reported first-quarter EBIT of $288 million, or 11.4 percent of sales, compared to $275 million, or 11.2 percent of sales, in the same prior-year period. During the quarter, the favorable impacts of product price/mix and unit volume growth more than offset raw material inflation.

Whirlpool Europe, Middle East and Africa reported first-quarter net sales of $1.1 billion, up from $1 billion in the same prior-year period. Excluding the impact of currency, sales decreased 8.1 percent. The region reported a first quarter loss on EBIT of $27 million, or 2.5 percent of sales, compared to a loss of $23 million or 2.3 percent of sales, in the same prior-year period. During the quarter, the favorable impacts of product price/mix and cost productivity were more than offset by raw material inflation, unit volume declines and foreign currency impacts.

Whirlpool Latin America reported first-quarter net sales of $898 million, down from $921 million in the same prior-year period. Excluding the impact of currency, sales decreased 3.2 percent. The region reported first-quarter EBIT of $57 million, or 6.3 percent of sales, compared to $66 million, or 7.2 percent of sales, in the same prior-year period. During the quarter, the favorable impacts of product price/mix and restructuring benefits were more than offset by unfavorable cost productivity and raw material inflation.

Whirlpool Asia reported first-quarter net sales of $448 million, up from $435 million in the same prior-year period. Excluding the impact of currency, sales decreased 1.9 percent. The region reported first-quarter EBIT of $19 million, or 4.2 percent of sales, compared to $24 million, or 5.6 percent of sales, in the same prior-year period. During the quarter, the favorable impact of cost productivity was more than offset by raw material inflation and foreign currency impacts.

More at www.whirlpoolcorp.com.

Whirlpool also announced the sale of its Embraco compressor business to Japan-based Nidec Corp. for $1.08 billion in cash. Headquartered in Brazil, Embraco has been a Whirlpool business unit since 1997. Its 11,000 employees are located in Brazil, Italy, China, Slovakia and Mexico. Embraco also maintains commercial offices in the United States and Russia.

The company said the transaction is not expected to have a material impact on Whirlpool’s 2018 financial results.

Whirlpool also announced it would use the proceeds of the Embraco sale for a buyback of up to $1 billion worth of its common stock, expected to launch April 26.

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