Chronicle Journal - Stories -

Opinion Poll
With a transit strike looming in Thunder Bay, what‘s your take on possible job action:
	It would be disruptive
	I’ll get by with other means
	I don’t use transit
	I hope there’s no stoppage

More Links	tbayjobline	TbayWeddings	Play Games!	^New! eVents Calendar	Advertise with Us	Contact Us

Other Links	Movie Times	Airport	Bus Schedule	Road Conditions	Library	Weather	Facebook	Twitter

Whirlpool Q3 profit falls 47 per cent; lifts full-year profit forecast
By Emily Fredrix, THE ASSOCIATED PRESS
Friday, October 23, 2009

Email this article
Printer friendly page

MILWAUKEE - Whirlpool Corp., the world’s biggest home appliance maker, raised its profit outlook for the year Friday, saying cost-cutting that has tempered steep sales declines will pay off in the final quarter of the year.

Whirlpool forecasts that economic uncertainty will continue to hold down demand for its big-ticket items in the U.S. and Europe, though Asia and Latin America are seeing improvements as those economies rebound.

That slumping demand, which has been going on for months, took a toll on the company’s third quarter, as its profit fell 47 per cent. Many shoppers are putting off appliance purchases amid a recession complicated by tight credit and falling housing prices, both of which hurt the market for appliances.

Whirlpool, whose other brands include Maytag and KitchenAid, has cut jobs and closed a factory to deal with lower sales.

The Canadian operation, Whirlpool Canada LP of Mississauga, Ont., generates more than $1 billion in revenue and has about 500 employees. Its brands also include Inglis, Estate amd Roper.

The improved outlook and earnings that handily topped expectations led Whirlpool shares to jump $4.38, or six per cent, to $77.92 in afternoon trading Friday.

The company also boosted its expectations slightly for the U.S. industry this year, although it still expects total industry shipments to decline 10 per cent. But that’s down from expectations shipments would fall as much as 12 per cent.

"We continue to see demand levels in the United States stabilizing, albeit at lower levels," CEO Jeff Fettig told investors on a conference call. September was "significantly better" than July or August, Fettig said.

The company could also benefit from federally funded rebates on energy-efficient appliances, a $300-million program that is expected to go into effect later this year or early next.

Standard&Poor’s analyst Ken Leon upgraded the stock, saying he expects revenue to rise 4.5 per cent in 2010, after falling 11 per cent this year. He boosted his price target to $80 from $55.

For the quarter, Whirlpool, based in Benton Harbor, Mich., earned $87 million, or $1.15 per share in the quarter, down from $163 million, or $2.15 per share, a year earlier.

Quarterly results included $43 million, or 50 cents per share, for a settlement with the Brazilian competition commission.

Sales for the quarter dropped eight per cent to $4.5 billion from $4.9 billion. Removing foreign currency fluctuations, revenue dipped about three per cent.

Analysts polled by Thomson Reuters expected profit of 77 cents per share on revenue of $4.28 billion. Analysts’ estimates generally exclude one-time items.

Revenue fell nine per cent in North America as U.S. industry unit shipments of major appliances declined six per cent.

In Europe, revenue tumbled 17 per cent, with overall industry unit demand down about 10 per cent. Without the effects of foreign currency, revenue fell 11 per cent. A strong U.S. dollar has been weighing on foreign sales, since those sales convert back to fewer dollars. But the dollar’s value is now dropping, which could help foreign revenue in future quarters.

The Latin American unit fared better, with sales up on increased Brazilian appliance demand. Sales also improved in Asia, with revenue up 18 per cent from the prior year - or 26 per cent without the effect of currency. Fettig said business in India was particularly strong.

Whirlpool has trimmed jobs and shuttered a refrigerator factory in Evansville, Ind. In August the company disclosed in a regulatory filing that it would face $51 million in costs related to the plant’s closing and 1,100 job cuts.

But the company has said it might call back 150 employees who were laid off at its Fort Smith, Ark. refrigerator factory.

Whirlpool now expects earnings of about $4.25 per share, up from a prior outlook for profit of $3.50 to $4 per share.

Analysts expect earnings of $4.05 per share for the year.

-With files from The Canadian Press

Top of Page

Games!
Canadian Crossword
PlayFour!
Word Roundup