By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Whirlpool said its acquisition of Maytag and "continued strong demand" for the company's products helped propel sales and earnings in the third quarter.
Net sales for the three months ended Sept. 30 skyrocketed 35 percent to $4.8 billion. Excluding Maytag's contribution, net sales rose 8 percent.
Net earnings from continuing operations, which included the operating results, integration costs and purchase accounting impact from the Maytag acquisition, increased 18 percent year-over-year to $134 million.
Maytag also buoyed revenue for the North America division. Sales soared 45 percent to hit a record $3.3 billion during the quarter, although minus Maytag's contribution, sales slipped about 4 percent. Operating profit of $195 million was impacted by higher material prices, acquisition integration and purchase accounting costs, increased freight expense, new product launch charges and a curtailment charge from a change in benefit plans. The costs were offset to some degree by acquisition efficiencies and cost-based price adjustments that were implemented mid-quarter, the company said.
"Customer response to our new product innovation remains strong as we continue the largest new product launch in our company's history," said chairman/CEO Jeff Fettig. Recent introductions include the rugged Epic front load laundry pair, the first new Maytag product under Whirlpool's stewardship; the high-efficiency top-load Cabrio laundry pair, which features an expansive 4.5-cubic-foot capacity; the Duet Sport HT, a smaller version of the best-selling Duet front load laundry system; and Kitchen Aid's Architect Series II platform of premium, commercial-look kitchen products.
Elsewhere, Maytag's integration "continues to progress well at an accelerated pace," Fettig said, as Maytag begins ramping down two acquired laundry facilities and production is transferred to its Ohio plants. The company alsocompleted the sale of the Amana commercial microwave business and finalized the sale of its Dixie Narco vending machine division, yielding combined proceeds of $100 million. Still on the auction block is the Hoover floor care business and Jade commercial products appliance unit.
Looking ahead, the company projects that full-year unit shipments will grow 1 percent for the industry in 2006. Fettig added that Whirlpool will continue to address the "heightened material cost environment" through productivity improvements, higher margin products, managing the overall mix of business, reductions in overhead, and additional cost based price adjustments.
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