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Whirlpool’s Q2 Sales Up, Earnings Down

7/23/2008 03:34:00 PM Eastern

Benton Harbor, Mich. — Whirlpool’s second-quarter earnings fell 27 percent to $117 million amid a backdrop of rising oil and materials costs and a weak U.S. market.

Still, sales for the world’s largest majap maker rose 5 percent to $5.1 billion for the three months, ended June 30, on strength in the Asian, European and Latin American markets, where revenues rose 9 percent, 17 percent and 22 percent, respectively.

“Whirlpool made solid progress toward improving operating results from first-quarter levels despite an increasingly challenging economic environment,” said Whirlpool chairman/CEO Jeff Fettig in a statement. “The cost inflation facing our business is significant, and we continue to take steps to address this challenge.”

Within the North American market, sales slipped 4 percent to $2.9 billion and operating profit fell 44 percent to $101 million. Whirlpool attributed the drops to significantly higher material and oil-related costs, lower industry demand and increased marketing expenditures, which were partially offset by improved productivity and a favorable mix of premium-priced products.

The company noted that majap industry unit shipments declined 8 percent in the United States during the quarter, and now projects industry shipments to fall 6 percent to 7 percent for the full year, down from previous forecasts of a 5 percent to 6 percent decline.

“The challenges resulting from significant global commodity inflation have persisted and, in many instances, accelerated,” Fettig said. “We continue to execute previously announced cost-based price increases and cost reduction actions related to our global operating platform initiatives. These actions, coupled with other productivity initiatives and bringing innovative new products to the marketplace, are critical to our ability to offset the record commodity and oil-related costs and lower industry demand.”

Whirlpool introductions during the quarter included:

·         Maytag’s Epic Z front-load laundry pair featuring commercial-grade components, high performance, a space-saving design and a new slate color;

·         KitchenAid’s 30-inch, five-burner gas cooktop, an industry first; an EQ dishwasher line with enhanced cleaning and drying performance and reduced noise and water and energy usage; and a double-drawer refrigerator/freezer combination;

·         Jenn-Air’s built-in refrigerator line featuring an integrated through-the-door ice and water dispenser and a custom overlay design option, plus a wall-mount chimney hood in an oiled bronze finish.

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