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Whirlpool Reports Higher Q3 Earnings

10/23/2007 03:40:00 PM Eastern

Benton Harbor, Mich. — Whirlpool reported higher third-quarter earnings but flat sales for the third quarter that ended Sept. 30.

Earnings from continuing operations were $175 million, up approximately 31 percent from the $134 million from the same period last year. Net sales of $4.8 billion, which were impacted by a weak U.S. market, remained unchanged from last year's levels, Whirlpool said.

Third-quarter earnings reflected strong improvement within the company's international businesses, cost-efficiency realization associated with last year's acquisition of Maytag, productivity improvements, cost controls and lower global taxes. The company's results also included $41 million of gains associated with asset sales and the sale of an investment, compared with the $42 million of asset sale gains reported in the previous year period. Results were adversely affected by significantly higher material and oil-related costs, lower demand within the United States and unfavorable currency, the company said.

“Our global operating platform, product innovation and strong consumer brands have enabled us to effectively manage through both the unprecedented global material cost environment which began more than three years ago, and more recent industry demand declines within the United States,” said Jeff M. Fettig, chairman/CEO of Whirlpool. “The international economic environment has remained favorable and our international businesses continue to deliver record financial results. The combination of record material and oil-related cost increases and weaker than expected appliance demand in the U.S. have negatively impacted our North American business.”

For Whirlpool North America third-quarter revenue of $2.9 billion was down 8 percent vs. the prior year period primarily due to weak U.S. industry demand and lower OEM shipments. Industry unit shipments of major appliances declined for both the current quarter and year-to-date period.

Operating profit of $132 million declined 24 percent from the previous year period primarily due to the continuation of significant material and oil- related cost increases for base metals, component parts, steel and fuel, as well as lower than expected U.S. demand. Continued strong acquisition efficiency realization partially offset the higher costs, the company said.

Industry shipment trends are expected to improve during the fourth quarter following five consecutive quarters of year-over-year declines. Based on current economic conditions, the company now expects full-year 2007 U.S. industry unit shipments to decline approximately 4 percent.

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