Whirlpool 2Q profit falls 33 pct on lower demand

GRAND RAPIDS, Mich. - A significant drop in consumer demand slashed second-quarter profit 33 percent at Whirlpool Corp., the world's largest maker of home appliances.

The profit was better than analysts expected, and the company brightened its full-year forecast. But Whirlpool's revenue dropped 18 percent to $4.17 billion from $5.08 billion, missing Wall Street's average forecast of $4.2 billion, and investors pushed the stock down $5.59, or 9.9 percent, to close at $50.75.

Whirlpool, whose brands include Maytag and KitchenAid as well as Whirlpool, earned $78 million, or $1.04 per share, for the period ended June 30. That's down from $117 million, or $1.53 per share, a year earlier.

Analysts surveyed by Thomson Reuters predicted a profit of just 51 cents per share.

Whirlpool has found that shoppers are still putting off some appliance purchases amid a recession complicated by tight credit and falling housing prices, both of which directly affect the market for appliances.

"Consumer demand for appliances was significantly lower in the second quarter, which negatively impacted our global unit volumes," Chairman and CEO Jeff M. Fettig said in a statement.

The sales decline was driven by lower unit volumes in both North America and Europe and sharpened by unfavorable foreign currency translation, Fettig said during a teleconference with industry analysts Wednesday.

Whirlpool cut costs and improved efficiency as it expected a significant drop in demand, volatile foreign currency and big changes in the financial markets, and that has helped the company weather falling sales, he said. The company is continuing to align its capacity and resources to lower demand levels, he said.

"We're beginning to see some positive impacts from those actions as we continue to aggressively execute our plan to ensure that we succeed in delivering in this very difficult environment," Fettig said.

Revenue at its North America division slipped 17 percent to $2.4 billion, while sales in Europe dropped 25 percent to $786 million. A new tax break in Brazil on the purchase of certain appliances helped improve Whirlpool's sales in Latin America, but appliance and compressor sales outside of Brazil continued to decline. The region saw a 16 percent drop overall to $844 million. One bright spot was Whirlpool Asia, which saw a 3 percent uptick in sales.

Benton Harbor, Mich.-based Whirlpool now expects full-year earnings of $3.50 to $4 per share, up from its prior forecast of $3 to $4 per share.

Analysts forecast full-year net income of $3.41 per share.

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