Whirlpool Corp. Profit Rises 8% In Q3 

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The FINANCIAL — Whirlpool Corporation announced on October 23 third-quarter GAAP net earnings of $235 million, or $2.95 per diluted share, compared to $230 million, or $2.88 per diluted share, reported for the same prior-year period. Ongoing business earnings per diluted share totaled a record $3.45 compared to $3.04 in the same prior-year period, primarily driven by the benefits of cost and capacity-reduction initiatives, ongoing cost productivity, favorable price/mix and benefits from acquisition integration activities.

Net sales in the quarter were a third-quarter record $5.3 billion compared to $4.8 billion during the same prior-year period, an increase of over 9 percent. Excluding the impact of currency, sales increased nearly 25 percent, according to Whirlpool Corporation.

“We are pleased with the strong financial results we delivered in the third quarter,” said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. “Our operating plans and focused execution delivered another quarter of record revenues, operating profit and earnings in spite of a challenging operating environment in several key emerging markets.”

Third-quarter GAAP operating profit totaled $329 million compared to $335 million in the same prior-year period. Record third-quarter ongoing business operating profit totaled $418 million, or 7.9 percent of sales, compared to $387 million in the same prior-year period. Benefits from acquisition integration activities, cost and capacity-reduction initiatives, ongoing cost productivity and favorable price-mix more than offset unfavorable currency, declining emerging market demand and increased investments in marketing, technology and products.

For the nine months ended September 30, 2015, the company reported cash used in operating activities of $(157) million compared to cash used in operating activities of $(128) million in the same prior-year period. Whirlpool Corporation reported free cash flow(3) of $(492) million in the first nine months of 2015 compared to free cash flow of $(532) million in the same prior-year period.

OUTLOOK

Whirlpool Corporation has updated its full year 2015 guidance primarily to reflect continued weakness in emerging market demand and negative currency impacts. As a result of these changes, along with the benefits of previously announced actions to improve margins, the company now expects to deliver GAAP earnings per diluted share of $9.75 to $10.25 and ongoing business earnings per diluted share of $12.00 to $12.50 for the full year 2015.

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For the full-year 2015, the company now expects to generate free cash flow(3) of approximately $600 million to $700 million. Included in this guidance are restructuring cash outlays of up to $200 million, capital spending of approximately $700 million to $750 million and U.S. pension contributions of approximately $72 million.

“We remain focused on value creation and executing our long-term growth strategy,” said Fettig, “and we will deploy additional actions as necessary to continue delivering strong returns for our shareholders.”

THIRD-QUARTER REGIONAL REVIEW

Whirlpool North America

Whirlpool North America reported third-quarter net sales of $2.8 billion, unchanged from the same prior-year period. Excluding the impact of currency, sales increased nearly 3 percent.

The region reported a third-quarter operating profit of $349 million, compared to $304 million in the same prior-year period. Ongoing business segment operating profit(4) totaled a third-quarter record of $336 million, or 12.0 percent of sales, compared to $304 million, or 10.9 percent of sales, in the same prior-year period. Ongoing cost productivity and favorable raw materials more than offset unfavorable currency and increased investments in marketing, technology and products.

The company expects full-year 2015 industry unit shipments to increase by approximately 5 percent.

Whirlpool Europe, Middle East and Africa

Whirlpool Europe, Middle East and Africa reported third-quarter net sales of $1.5 billion, compared to $0.8 billion in the same prior-year period, an increase of 85 percent. Excluding the impact of currency, sales increased over 127 percent.

The region reported third-quarter operating profit of $32 million, compared to $9 million in the same prior-year period. Ongoing business segment operating profit totaled a third quarter record $71 million, or 4.9 percent of sales, compared to $9 million, or 1.2 percent of sales, in the same prior-year period. The benefits from acquisition integration activities, favorable price-mix, ongoing cost productivity and the benefits of cost and capacity-reduction initiatives more than offset unfavorable currency and increased investment in marketing, technology and products.

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The company expects full-year 2015 industry unit shipments to be flat to up 2 percent.

Whirlpool Latin America

Whirlpool Latin America reported third-quarter net sales of $0.8 billion, compared to $1.1 billion in the same prior-year period. Excluding the impact of currency, sales decreased by 7 percent.

The region reported third-quarter GAAP operating profit of $31 million, or 4.2 percent of sales, compared to $118 million, or 10.4 percent of sales, in the same prior-year period. Improved product price/mix and the benefit of cost and capacity reductions were more than offset by unfavorable currency and lower unit volumes due to a weaker demand environment in Brazil.

The company expects full-year 2015 industry unit shipments in Brazil to decrease by approximately 20 percent.

Whirlpool Asia

Whirlpool Asia reported third-quarter net sales of $346 million, compared to $157 million in the same prior-year period, an increase of 120 percent. Excluding the impact of currency, sales increased over 127 percent.

The region reported a third-quarter GAAP operating profit of $24 million, compared to an operating loss of $(8) million in the same prior-year period. Ongoing business segment operating profit(4) totaled a third quarter record $27 million, or 7.7 percent of sales, compared to $(8) million, or (5.0) percent of sales, in the same prior-year period. Benefits from acquisition integration activities, favorable raw materials and the benefits of cost and capacity-reduction initiatives positively impacted margins.

The company expects full-year 2015 industry unit shipments to decrease by approximately 2 percent.

 

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