Benton Harbor, Mich. — Whirlpool said cost and capacity reductions and improved productivity drove solid first-quarter profits, although weakened offshore demand and the strong U.S. dollar suppressed sales.
Net earnings rose 19.4 percent to $191 million for the three months, ended March 31, and net sales increased 9 percent to $4.8 billion for the period. But excluding the impact of unfavorable currency exchange rates and Brazilian tax credits, sales increased over 23 percent, driven primarily by the recent acquisitions of China’s Hefei Sanyo and Italy’s Indesit.
Whirlpool said sales were also constrained by weak demand in Brazil.
In a statement, Whirlpool chairman/CEO Jeff Fettig said the integration of the acquisitions remains on track; that the company has “taken actions” to address the currency fluctuations, including price increases in Brazil, Canada and Eastern Europe; and is adjusting to “a continuing volatile global economy.”
In North America, first-quarter net sales edged up slightly to $2.3 billion, and increased 2 percent excluding the impact of currency. Operating profit was up 21 percent to $276 million, which included a one-time, non-cash benefit plan curtailment gain of approximately $47 million.
Ongoing business segment operating profit totaled $230 million, or 9.8 percent of sales in North America, compared with $228 million, or 9.8 percent of sales for the year-ago period.
Whirlpool said ongoing cost productivity and higher unit volumes were offset by the strong dollar and the completion of prior-year product transitions.
Looking ahead, Whirlpool is projecting record sales and earnings for the year, and has earmarked $750 million to $800 million on capital spending.
It also lowered its projected increase in full-year industry shipments to 4 percent, from its February forecast of a 4 percent to 6 percent gain.
Added Fettig: “Our previously outlined long-term growth strategy remains on track and we are committed to creating significant shareholder value with our larger global platform, competitive cost structure, industry leading brands and broad product offering.”