Whirlpool Problems Go Beyond Domestic Slowdown
CNBC "On-Air Stocks" Editor
The divide between strong international/weak domestic is nowhere more evident than with Whirlpool . Whirlpool noted that the strength was in international and the costs savings generated by the Maytag acquisition. North American revenue was down 8% due to weak demand. Europe was up 12%, Latin America up 23%, Asia up 18%. Whirlpool still generates 60% of its sales in the U.S., so the U.S. slowdown is particularly important for them.
But there are other issues besides the domestic slowdown. Operating margins were well below most estimates; higher raw material costs were a major factor. Whirlpool itself may be selling less than expected; JP Morgan says that "we believe new product efforts in MYG brands may have fallen short amid difficult industry trends this quarter."
They are also seeing some weakness in the OEM business. OEM refers to original equipment manufacturer, where Whirlpool sells its products under another brand. For example, they make Kenmore (a Sears brand), which has been losing market share.
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