Financial report: Whirlpool anticipates a strong second half

By Tony Wittkowski | Business Reporter | The Herald-Palladium

BENTON HARBOR — Sales were up while earnings remained almost flat for Whirlpool Corp.’s second quarter, the company revealed Wednesday.

Company officials said the picture will get brighter for the year’s second half.

“Our integration activities in Europe and Asia are progressing well, and we’ll continue to accelerate these integrations as we move into the second part of the year,” Jeff Fettig, Whirlpool’s CEO and chairman, said in a conference call with investors Wednesday. “Those plans are on track to deliver record revenue and ongoing earning performance for the year.”

He said the majority of margin growth will take place in the fourth quarter.

Whirlpool reported quarterly net earnings of $177 million or $2.21 per diluted share, compared to $179 million and $2.25 last year.

Whirlpool’s stock closed Wednesday at $178.36 per share on the New York Stock Exchange, a 3.1 percent increase from the day’s opening price.

Net sales were a second-quarter record at $5.2 billion, compared to $4.7 billion reported during the same period last year – an 11 percent increase. Excluding the impact of foreign currency, sales increased more than 25 percent, driven by acquisitions in other regions.

Ongoing business operating profits for the second quarter totaled $355 million, compared to $330 million last year.

Regional efforts

Whirlpool North America reported second-quarter net sales of $2.7 billion, up slightly from the same prior-year period. Excluding the impact of currency, sales increased more than 1 percent.

The North America region reported an operating profit of $287 million, 10.8 percent of sales, compared to $227 million, about 8 percent of sales, in the prior year.

Higher unit volumes and ongoing cost productivity offset unfavorable currency inflation. The company expects full-year 2015 industry unit shipments to increase by about 4 percent.

While inflation has hurt earnings, they have been offset by cost-based pricing. Excluding the impact of inflation, Whirlpool’s revenue was up 25 percent versus last year.

Marc Bitzer, president of Whirlpool North America and Whirlpool Europe, Middle East and Africa, said this figure was driven by strong earnings in Europe and Asia.

“Our ability to deliver these results in this environment reflects the strength and focus of our execution and the benefit of our expanded global operating platform,” he said.

For the second quarter, Whirlpool Europe, Middle East and Africa reported net sales of $1.3 billion compared to $700 million in the prior year, an increase of 79 percent – excluding the impact of currency, sales increased more than 127 percent.

The region reported an operating profit of $51 million, compared to $2 million in the same quarter last year. Whirlpool expects full-year 2015 industry unit shipments in the region to be flat or increase up to 2 percent.

Whirlpool Latin America reported second-quarter net sales of $900 million, compared to $1.1 billion in the prior year. Excluding the impact of currency, sales increased 1 percent.

The region reported a $36 million operating profit, or 4.2 percent of sales. This fared in comparison to $87 million, or 8 percent of sales from last year. Improved product price and the benefit of cost and capacity reductions were offset by unfavorable currency and a weaker demand environment in Brazil. The company expects full-year industry shipments in the region to decrease by about 15 percent.

Whirlpool Asia reported second-quarter sales of $381 million, compared to $211 million in the prior year. Excluding the impact of currency, sales increased more than 85 percent. Operating profit of $31 million, about 8.1 percent of sales, was high compared to last year’s $4 million operating profit.

The company expects full-year 2015 regional industry unit shipments to remain flat.

Contact Tony Wittkowski at twittkowski@thehp.com or (269) 932-0358. Follow him on Twitter @tonywittkowski.

(Author’s Note: This article was originally published on July 23, 2015)

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