Whirlpool Posts Record Results; Maytag Deal On Track
By Alan Wolf -- TWICE, 2/13/2006
Benton Harbor, Mich. — Whirlpool posted record sales and earnings for the fourth quarter and full year in 2005.
The company reported global net earnings of $126 million for the three months, ended Dec. 31, 2005, up from $97 million during the year-ago period, while full-year net earnings hit a record $422 million in 2005, compared with $406 million the year prior.
Net sales for the fourth quarter grew 9 percent from the prior-year period to $4 billion, an increase of 8 percent excluding currency translations. For the full year, net sales ballooned $1.1 billion, or 6 percent, excluding currency translations to $14.3 billion.
The solid results came despite “all-time high levels of material and oil-related costs,” recounted Jeff Fettig, Whirlpool's chairman/CEO, who attributed the gains to “very positive consumer demand for our new product innovations, strong sales performance, disciplined cost controls and overall outstanding execution by our people around the world.”
During the fourth quarter, net earnings increased 30 percent and operating profit margins expanded by one point thanks to productivity gains, price increases, volume growth, tax credits and a lower effective tax rate, the company said, offsetting higher incentive compensation, higher restructuring costs, increased reserves for litigation, and material and oil-related cost increases that totaled $55 million in the fourth quarter and $535 million for the year.
Within its North American operations, Whirlpool posted record fourth-quarter revenue of $2.4 billion, an increase of 12 percent year-over-year which handily outpaced the majap industry's 5 percent gain during the period. On a unit basis, Whirlpool's factory shipments matched the industry for the full year, growing by 2 percent.
Operating profit grew 36 percent to $226 million during the quarter, and operating margins increased 1.6 points, to 9.2 percent. Higher material and oil-related costs were offset by the combination of price hikes, controllable productivity improvements and reductions in general and administrative expenses.
Looking ahead, Fettig said, “Our business is well positioned entering 2006 as we will launch the largest number of new products-to-market in the company's history. Our innovation pipeline continues to grow, consumer and trade response has been strong, and we continue to execute our strategy of delivering consumer-relevant innovation to our customers worldwide.”
The 2006 product rollouts include:
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the Whirlpool-branded Cabrio top load laundry pair with 4.5 cubic feet of capacity, or the equivalent of three laundry baskets in a single load. The platform significantly reduces dry time through a combination of the washer's ultra-fast spin speed and the dryer's AccelerCare system, and saves more than half the energy and water used by conventional top-load washers, the company said. The Cabrio system will be available in July 2006.
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the Whirlpool-branded Duet Sport and Duet Sport HT models, smaller versions of the popular Duet front-load pair, featuring a six-point suspension to reduce vibration and noise. Like their larger brethren, the units use less than half the water and energy of conventional top-loaders. The Duet Sport model will be available next month and the Duet Sport HT model, with a super-capacity washer drum and high-temperature sanitary cycle, will be available in May 2006.
The company has also redesigned its “classic” Whirlpool-branded top-load washer and dryer with new technology to simplify cycle selections and ensure optimal wash temperature. The washer has added built-in sensors to monitor wash water, while the dryer's AccelerCare system dries clothes as fast as the washer cleans them. Both will be available in May.
In cooking, the company has launched the Whirlpool Gold Velos SpeedCook oven, which combines the capacity and performance of an oven with the speed of a microwave.
Fettig said that Whirlpool still expects to conclude its acquisition of Maytag this quarter.
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