Whirlpool Profits More Than Double

Benton Harbor-based Whirlpool Corp. (NYSE: WHR) Tuesday announced second quarter net income of $205 million or $2.64 a sahre, up 163 percent from $78 million or $1.04 a share in the same period last year.

Sales of $4.5 billion increased 9 percent from the $4.2 billion reported in the second quarter of 2009. Excluding the impact of foreign exchange translation, the company's second-quarter sales increased approximately 6 percent.

Second-quarter operating profit totaled $331 million compared with $134 million in the prior year. Results were favorably impacted by cost reduction and productivity initiatives, global unit volume growth and increased monetization of certain tax credits. These favorable factors were partially offset by higher material and oil-related costs and lower product price mix.

"We made strong progress towards our long-term value creation goals during the second quarter," said Jeff M. Fettig, chairman and CEO of Whirlpool Corp. "Global unit volume growth combined with our ongoing productivity improvements enabled us to expand our operating margins and accelerate profitable growth."

During the six months ended June 30, the company reported cash flow from operations of $170 million.

In North America, second-quarter sales of $2.5 billion increased 6 percent from the prior year. Excluding the impact of foreign exchange translation, second-quarter sales increased approximately 4 percent. North America unit shipments increased 7 percent. U.S. industry unit shipments of major appliances increased 12 percent during the second quarter.

The North America region reported operating profit of $200 million compared to $120 million in the previous year. Second-quarter 2010 results included a $33 million curtailment gain related to post-retirement benefits. Second-quarter 2010 adjusted operating profit for the North America region totaled $167 million compared to $120 million in the prior year. The improvement was primarily the result of cost reduction, productivity initiatives and increased sales volume. These factors were partially offset by lower year-over-year product price/mix and higher material and oil-related costs.

Based on the current economic outlook, the company expects full-year 2010 U.S. industry unit shipments to increase approximately 5 percent compared to the previous expectation of a 3 percent to 5 percent increase.

Whirlpool Europe reported second-quarter sales of $739 million, a 6 percent decrease from the prior year. Excluding the effects of currency, sales were approximately equal to the prior year. Overall industry unit demand during the quarter increased approximately 1 percent compared with the prior year.

The region reported an operating profit of $20 million during the second quarter compared to an operating loss of $12 million in the previous year. The year-over-year improvement was primarily the result of cost reduction and productivity initiatives.

The company continues to expect full-year 2010 industry unit shipments to be approximately equal to 2009 levels.

Whirlpool Latin America reported second-quarter net sales of $1.0 billion, an increase of 24 percent from the prior year. Excluding currency translation, sales increased approximately 13 percent.

Operating profit totaled $165 million in the second quarter compared with $75 million in the prior year. The improvement in profitability is primarily related to cost reduction and productivity initiatives, increased monetization of certain tax credits and favorable price/mix. During the second quarter of 2009, the region recorded an $11 million benefit related to refundable energy surcharge credits which did not recur during 2010.

The company continues to anticipate full-year 2010 Brazilian appliance shipments will increase approximately 10 percent.

Whirlpool Asia reported second-quarter sales of $263 million, increasing 43 percent from the prior year. Excluding the impact of currency, sales increased 34 percent. Operating profit during the quarter totaled $15 million, an increase of $4 million from the prior year. The year-over-year increase in operating profit was mainly attributable to higher unit volumes and was partially offset by higher material and oil-related costs.

The company continues to anticipate full-year 2010 industry unit shipments in Asia to increase 5 percent to 8 percent.

For the full year 2010, Whirlpool now said it expects earnings per diluted share between $9 and $9.50 compared to its previous outlook of $8 to $8.50. For the full year, the company expects to generate free cash flow of about $550 million to $650 million compared to its previous outlook of $500 million to $600 million.

(c) 2010, WWJ Newsradio 950. All rights reserved.