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Whirlpool N.A. Posts Higher Q4 Sales, Lower Profits

2/07/2007 10:08:00 AM Eastern

Benton Harbor, Mich. — Whirlpool reported higher sales for its North American operations during the fourth quarter, driven by the acquisition of Maytag earlier in the year, but lower profits for the region.

Whirlpool said fourth-quarter sales increased 29 percent vs. the year-ago period to $3.2 billion. The manufacturer said that industry unit shipments, which fell about 8 percent during the quarter, negatively impacted margins.

Fourth-quarter operating profit for the region was $148 million, which declined $79 million from the year-ago period, due to “significant increases in material costs, lower production as the company adjusted inventory levels with reduced industry demand, acquisition integration costs and increased merchandising expense.”

Based on current economic conditions, Whirlpool expects 2007 industry unit shipment s to decline about 2 percent to 3 percent.

For the fourth quarter, ended Dec. 31, 2006, companywide net sales were up 25 percent to $4.95 billion, up from $3.95 billion, and net earnings were down to $109 million from the previous year’s $126 million.

Fourth-quarter results were negatively impacted by significantly higher material prices, lower U.S. industry appliance demand and higher interest expense.

For the year, ended Dec. 31, 2006, companywide net sales were $18.0 billion up from $14.3 billion the previous year, and net earnings were $433 million, up from $422 million in the prior year.

Jeff M. Fettig, Whirlpool chairman/CEO, said in a prepared statement, “During 2006, we completed the largest acquisition in the history of our company and introduced a record number of new innovative products. Additionally, our international businesses delivered record level results. We remain confident in our ability to realize significant shareholder value from the Maytag acquisition, and believe the opportunities unique to this transaction will positively change our long-term performance capabilities.”

Fettig added, “We expect to benefit from the ramp up of acquisition efficiencies, new product introductions to revitalize the Maytag brand, continued improvements in our international operations and product innovation during 2007.”

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