Whirlpool Posts 11% Sales Gain, $29 Million 4th Qtr. Loss
By Jeff Malester -- TWICE, 2/10/2003
BENTON HARBOR, MICH.— Pointing to brand and innovation strategies — as well as the success of new-product introductions — for much of its sales improvement, major appliance maker Whirlpool said it racked up net sales of $2.9 billion in the fourth quarter. The gain was an 11 percent increase over the $2.6 billion reported in the year-ago period.
However, Whirlpool recorded a loss of $29 million for the three months, ended Dec. 31, compared with net earnings of $21 million year over year. The company blamed restructuring charges and a previously announced write-off of aircraft-lease assets for the negative number.
Last December, the company said it would take an after-tax charge of $68 million, due to the falling value of aircraft leases it holds. The losses came about due to United Airlines' parent UAL filing for bankruptcy.
Excluding these charges, core earnings from operations increased to a pro forma $113 million for the fourth quarter, up from a pro forma $109 million in the same three months in 2001.
In North America, Whirlpool reported record fourth quarter sales of $1.9 billion, a 16 percent improvement over the same quarter the previous year. Operating profit for North America was down slightly from the previous year, due to reduced pension credit, higher spending for brand advertising and innovation initiatives and reduced production volume to balance inventory levels during the quarter.
For the 12 months, Whirlpool net sales climbed 6.5 percent, hitting $11 billion, up from $10.3 billion in 2001. The majap manufacturer reported a net loss of $394 million for the period, compared with net earnings of $21 million in the same quarter a year ago.
Full year earnings were significantly affected by a non-cash, after-tax goodwill impairment charge of $613 million related to a change in accounting principle, a $121 million after-tax restructuring charge and a $43 million after-tax write-off of aircraft lease assets.
Excluding one-time charges, full-year core earnings reached a pro forma $420 million, compared with a pro forma $371 million in 2001.
