Whirlpool N.A. Sales Increase 12%

By Jeff Malester -- TWICE, 5/8/2006

Benton Harbor, Mich. — Strong consumer demand for branded product innovation at Whirlpool helped increase North American first-quarter sales 12 percent, rising to $2.2 billion.

Unit shipments of major appliances in North America exceeded industry levels, which increased about 6 percent in the three months, said Whirlpool. Laundry was a stick-out, the company reported, with trade and consumer response to the company's new laundry innovation “exceptional.”

First-quarter operating profit in North America climbed 19 percent, reaching a record $216 million, with margin improving 0.6 percent, to 9.8 percent, due to strong demand, favorable product mix and productivity improvements that more than offset new product introduction costs.

Among the new majap laundry products from Whirlpool were the Cabrio washer-and-dryer design that is said to save more than half the energy and water used by conventional top-load washers. Also new were the Duet Sport and Duet Sport HT, smaller versions of the company's “popular” Duet front-load pair, and the redesigned Classic top-load washer and dryer that offer new technology to simplify cycle selections.

Consolidated Whirlpool sales in the first quarter, ended March 31, increased 10 percent, hitting $3.5 billion, up from $3.2 billion.

Net earnings rose 37 percent in the three months, reaching $118 million, compared with $86 million the previous year.

Results in the quarter do not include Maytag, which Whirlpool acquired in late March. Expenses of $13 million associated with the transaction are included within the company's first-quarter operating profit. Maytag's operating results will be included in Whirlpool's second-quarter statement of operations.

“Our first-quarter results reflect solid performance by all regional businesses, [and] strong earnings momentum generated from innovation, productivity and leverage from our global operating platform,” said Jeff Fettig, chairman/CEO.

Whirlpool claimed record unit shipments, sales growth and a positive product mix that combined with productivity improvements to drive a double-digit improvement in operating profit and offset acquisition-related expenses, higher commodity prices, higher new product introduction costs and increased restructuring costs.

“Industry demand remains positive, and we continue to maintain our outlook on the strength of the economic environment, despite volatile commodity prices,” said Fettig.

Looking ahead, Whirlpool said its plans include accelerating new product innovation to the marketplace, driving total cost productivity, increasing investments in consumer activities and managing its overall mix of business.