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More Downside in Whirlpool: Real-Time Trade

Thursday, 26 Apr 2012 | 2:10 PM ET

Shares of Whirlpool have already slipped about 15% over the past month, but trader Mike Murphy insists there’s more downside to come.

His call may seem counter-intuitive if you look at the Whirlpool earnings headlines. The appliance maker beat the Street.

Although net income at Whirlpool fell to $92 million, or $1.17 a share – results beat analysts' average estimate of $1.12 a share, according to Thomson Reuters.

That would seem positive.

However Whirlpool’s relative strength was due to higher prices – and Murphy doesn’t like that.

“They’re increasing prices but not increasing sales,” he says. And Murphy believes ultimately higher prices will send buyers elsewhere. In turn, that should force the company to revise its forecast. “Either they need a big upswing in demand, or their volumes won’t be anywhere near what they’re guiding for,” he says on CNBC's Fast Money Halftime Report.

Also Murphy believes recent price action underscores the Street’s distrust of this stock.

“The stock started to turn south in the morning when the company said on the conference call that they were seeing a lot of inflationary pressure and they weren’t expecting consumer confidence until the end of the year,” Murphy says

And Murphy sees yet another cause for concern. “There was a ruling that allows refrigerators from South Korea and Mexico to come into the US without extra taxes.” That too should be negative for Whirlpool.

All told, “I think there’s more downside,” he says.

Whirlpool Q1 Earnings Fall 46%
Michael Murphy, CEO of Rosecliff Capital, offers insight on Whirlpool's earnings report. Meanwhile Paul Coster, JPMorgan analyst, discusses whether Coinstar can survive the drop in DVD sales.





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Trader disclosure: On Apr 26, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephanie Link is long AAPL; Stephanie Link is long IBM; Stephanie Link is long KO; Stephanie Link is long DD; Pete Najarian is long AAPL; Pete Najarian is long C; Pete Najarian is long MS; Pete Najarian is long INTC; Pete Najarian is long YHOO; Pete Najarian is long SBUX CALLS; Pete Najarian is long INTC CALLS; Pete Najarian is long COP; Pete Najarian is long PEP

For Andy Busch
Nothing to disclose

For Mark Mahaney
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Amazon.com Inc, AKAM
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of AMZN
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of EBAY
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of NFLX

For Paul Coster
JPMS makes a market in the stock of CSTR
J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: CSTR
J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-securities-related: CSTR
J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from CSTR

For Brent Thill
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided: NUAN
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and non-securities services are being, or have been, provided: NUAN
Within the past 12 months, UBS Securities LLC has received compensation from this company/entity: NUAN

For Dan Dicker
Dan Dicker is short CHK

For Mike Murphy
Mike Murphy is short WHR

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  Price   Change %Change
WHR
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