Financial Report: Whirlpool doubles earnings in fourth quarter

By Tony Wittkowski | Business Reporter | The Herald-Palladium

BENTON HARBOR — Earnings exceeded expectations and sales fell short in Whirlpool Corp.’s fourth quarter of 2015, the company revealed Friday.

The Benton Harbor-based home appliance maker reported quarterly net earnings of $180 million or $2.28 per diluted share, more than doubling the net earnings recorded for the same prior-year period of $81 million.

“Our strong operational execution delivered another year of record revenue and earnings per share along with strong free cash flow,” Jeff Fettig, Whirlpool’s CEO and chairman, said in a conference call with investors Friday. “These record results demonstrate that our strategy and larger global operating platform continue to create substantial levels of shareholder value even in a year of unprecedented volatility in global markets.”

Net sales in the quarter were $5.6 billion compared to $6 billion during the same prior-year period. Excluding the impact of currency and driven by acquisitions in other regions, sales increased 4 percent.

“As planned, we delivered significant dividends in the fourth quarter,” Fettig said. “The majority of margin growth took place in the fourth quarter.”

Whirlpool’s stock closed Friday at $134.39 per share on the New York Stock Exchange, a 1.8 percent increase from the day’s opening price.

Ongoing business operating profits for the fourth quarter totaled $468 million – about 8.5 percent of sales – compared to $456 million last year.

For the full year, net sales for 2015 were $20.9 billion, compared to $19.9 billion in 2014. Excluding the impact of foreign currency, sales increased by 18 percent.

Operating profit totaled $1.3 billion, compared to $1.2 billion in 2014. Net earnings per diluted share increased to $9.83 compared to $8.17 for 2014.

During Friday’s conference call, Whirlpool officials told shareholders to expect to see earnings per diluted share of $11.25 to $12 for the full year of 2016 and ongoing business earnings per diluted share of $14 to $14.75.

For the full year 2016, Fettig said the company expects to generate free cash flow of $700 million-$800 million.

“Our plans to create long-term value for our shareholders remain unchanged, and our strategic priorities remain focused on profitable revenue growth, leading consumer innovation and best cost structure,” Fettig said. “We will continue to be decisive and disciplined in managing operations around the world.”

Regional efforts

Whirlpool North America reported fourth-quarter net sales of $2.9 billion, which were up slightly from the $2.8 million recorded in the same prior-year period. Excluding the impact of currency, sales increased 6 percent.

The North America region reported an operating profit of $340 million compared to $255 million in 2014.

For the fourth quarter, Whirlpool Europe, Middle East and Africa reported net sales of $1.5 billion compared to $1.7 billion in the prior year, a decrease of 11 percent – excluding the impact of currency, sales actually increased 8 percent.

The region reported an operating profit of $88 million, compared to $41 million in the same quarter last year. Whirlpool expects full-year 2016 industry unit shipments in the region to be flat or increase up to 2 percent.

Marc Bitzer, president and chief operating officer, said this figure was achieved despite a poor performance from Russia in 2015.

“During the fourth quarter, strong execution of our integration plan and ongoing cost productivity mostly offset $45 million in unfavorable currency and a significant industry decline in Russia,” he said. “Last year, we saw an unusually strong fourth quarter in Russia, as consumers bought heavily before devalution.”

Whirlpool Latin America reported fourth-quarter net sales of $800 million, compared to $1.3 billion in the prior year. Excluding the impact of currency, sales decreased by 8 percent.

The region reported a $58 million operating profit, or 6.8 percent of sales. This fared in comparison to the $147 million operating profit 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 2016 industry unit shipments in Brazil to decrease by about 10 percent.

Whirlpool Asia reported fourth-quarter sales of $312 million, compared to $282 million in the prior year. Excluding the impact of currency, sales increased 15 percent. The region reported an operating profit of $5 million, compared to an operating loss of $22 million in the prior period.

The company expects full-year 2016 industry unit shipments to be 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 Jan. 30, 2016)

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