Benton Harbor, Mich. - Whirlpool reported third-quarter net earnings of $79 million, lower than the $87 million posted for the same period last year.
Sales for the quarter ended on Sept. 30 were $4.5 billion, an increase of 0.5 percent from $4.5 billion in the third quarter of 2009.
Third quarter operating profit totaled $234 million compared with $189 million in the prior year. Results were favorably impacted by cost reduction and productivity initiatives and increased monetization of certain tax credits. These favorable factors were partially offset by higher material costs and lower product price/mix. Third-quarter adjusted operating profit totaled $234 million compared to $193 million in the prior year, the company said.
"As expected, we faced a challenging environment during the quarter which resulted in a significant slowing in sales growth compared to the first half of the year," said Jeff M. Fettig, chairman/CEO of Whirlpool Corporation. "Our ongoing focus on cost reductions, productivity and innovative new product launches continues to enable us to adapt to changes in the macroeconomic environment."
In North America third quarter sales were $2.4 billion, a 3 percent decrease from the prior year. North America unit shipments increased approximately 1 percent. U.S. industry unit shipments of major appliances decreased 3 percent during the third quarter, Whirlpool noted.
Third quarter 2010 adjusted operating profit for the North America region totaled $114 million compared to $147 million in the prior year. Third-quarter results were unfavorably impacted by lower product price/mix and higher material costs. These factors were partially offset by favorable cost reduction and productivity initiatives.
Based on the current economic outlook, the company now expects full-year 2010 U.S. industry unit shipments to increase approximately 3 percent compared to the previous expectation of a 5 percent increase.
During a conference call, executives attributed higher North American inventory levels to product transitions, weaker than expected demand, and a traditional seasonal build-up in advance of the fourth quarter.
Fettig noted that the North American unit cut prices in two key product categories during the quarter in response to "extremely aggressive" pricing by competitors and "a sharp change in demand."
Whirlpool North America president Marc Bitzer said the price cuts, plus positive consumer response to several product launches, led to "strong brand share growth" during the quarter. New product introductions included:
- Whirlpool brand's top-of-the-line front-load Duetlaundry pair, which uses as little as 11.5 gallons of water per load;
- Whirlpoolbrand'sCabriohigh-efficiency top-load laundry pair, which uses 74 percent less water and 76 percent less energy per load compared to conventional pre-2004 top-load washers;
- Maytagbrand's Ice20 Easy Access four-door refrigerator, touted as the industry's most energy efficient four-door refrigerator ;
- KitchenAid brand's large-capacity dual-fuel double oven range and dishwasher with retro-style recessed handle;
- Amanabrand's Tandemfront-load laundry pair, which uses 73 percent less water and 71 percent less energy compared to conventional pre-2004 top-load washers.
Bitzer added that Black Friday promotional activity will mirror last Thanksgiving weekend, with the greatest participation by national chains and more limited promotional activity by the independent dealer channel.