Whirlpool Shares Surge on Strong Maytag, International Sales
Whirlpool reported lower but much better-than-expected first-quarter profit as strong international appliance sales helped offset declining U.S. demand.
The world's biggest appliance maker backed its previous forecast for full-year earnings. It said it still expected lower U.S. demand through the first half, with gradual improvement the rest of the year.
Whirlpool delivered "good solid results" on success of new, higher-priced products and international improvement, Morgan Keegan analyst Laura Champine said.
"Higher raw materials costs are hurting, but they are controlling (general) expenses very well," Champine added.
Net earnings came to $117 million, or $1.46 a share, down from $118 million, or $1.70 a share, a year earlier.
Excluding discontinued operations, earnings were $1.55 a share, better than the $1.12 analysts expected, according to Thomson Financial.
Total sales rose 24% to $4.39 billion, helped by the inclusion of Maytag, which Whirlpool acquired last year, and strong international results. Excluding Maytag, sales were up 2%.
In North America, Whirlpool's largest market, revenue rose 27%. But operating profit in the region fell by $37 million to $159 million, hurt by lower industry appliance demand amid the slower U.S. housing market, Maytag integration costs, and higher steel and parts expenses.
Quarterly revenue rose 15% in Europe, 29% in Latin America and 20% in Asia. The company said it expected Latin America shipments to rise 15% to 20% for the year, up from its forecast in February for a gain of 10% to 12%.
In the United States, industrywide shipments of washers, refrigerators and other major appliances fell 9.5% during the quarter. Whirlpool said it still expected U.S. industry shipments to decline about 2% to 3% for the year.
New U.S. products include an upgraded version of Whirlpool's Duet front-loading washer-dryer pair and the Maytag Bravos, a high-efficiency top-load washer that sells for about $1,000.
Whirlpool, based in Benton Harbor, Michigan, said it still expected a profit of $8 to $8.50 a share for the full year.
Analysts have forecast $7.99, according to Thomson Financial.
The company said the Maytag integration was going well and it still expects savings of more than $400 million by 2008. As a result of the 2006 Maytag buyout, which included the Amana and Jenn-Air brands, Whirlpool became the world's largest appliance company.
Whirlpool shares, which closed at $90.35 on Monday, have risen 9% so far this year.
