Whirlpool reaffirms fiscal footing amid Brexit fallout

By Tony Wittkowski | Business Reporter | The Herald-Palladium

BENTON HARBOR — In Brexit’s wake, Whirlpool Corp. is looking to reassure shareholders.

Voters in the United Kingdom voted last week for leaving the European Union, delivering a blow to several economies and businesses’ stock prices.

Whirlpool’s stock fell 9.1 percent the day after British voters told Parliament to pull the nation from the EU.

Since home appliances have become a global effort for Whirlpool, the Benton Harbor-based company released a statement reassuring stockholders they are still on target for its full-year guidance.

“Clearly the ‘Brexit’ vote has created a number of uncertainties, many that will take some time to play out,” Jeff Fettig, chairman and chief executive officer of Whirlpool, stated in a news release. “The U.K. is an important country for us, and we plan to continue delivering innovative new products in the U.K. and Europe.”

Business in the U.K. represented about 5 percent of Whirlpool’s global revenue in 2015, while most of its products sold there were produced in other European countries.

Fettig said Whirlpool regularly performs risk assessments as part of the operational planning cycle and began to prepare for any fallout prior to the vote.

In the past, Fettig said the company has used several approaches to manage volatility, including financial hedging.

“As we have done in the past in all markets, we are prepared to take swift actions to offset the negative impact to our EMEA operations,” Fettig said, in reference to the Europe, Middle East and Africa region. “We will continue to monitor the situation closely to determine if additional actions may be required.”

The company plans to execute a previously announced cost-based price increase in the third quarter and expects to continue with ongoing cost productivity programs to lower overall costs in the EMEA region.

Since European currency has lost some of its value, the dollar has grown stronger. Because the value of a dollar has increased, Whirlpool’s appliances are now more expensive abroad.

Whirlpool still plans to announce its second quarter earnings during the week of July 18.

Based on the environment and strength of other parts of its global operations, Whirlpool is reaffirming its full-year guidance of earnings per diluted share of $11.25 to $12 and ongoing earnings per share of $14 to $14.75.

The company expects to generate cash provided by operating activities of $1.4 million to $1.55 million and free cash flow of $700 million to $800 million.

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 June 29, 2016)

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