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Whirlpool Reports Lower Q4 Sales, Earnings

BENTON HARBOR, MICH. -In line with its revised expectations issued in mid-December, major appliance manufacturer Whirlpool reported net sales of $2.6 billion for the fourth quarter, down 4 percent from the $2.7 billion recorded in the year-ago period. Net earnings in the fourth quarter were $67 million, down from the $113 million reported in the same three months last year.

Whirlpool North America reported lower year-over-year fourth-quarter sales and operating profits, pointing toward slowing consumer demand and intense competitive pricing pressures as the reason for the drop. Yet, despite the challenging environment, Whirlpool said, it gained market share in the fourth quarter ended Dec. 31 and in the full year.

“We produced the fourth-quarter results in line with previous guidance,” said chairman/CEO David R. Whitwam. “The year 2000 was challenging. In the first and second quarters, we set all-time company performance records. Then, in the third and fourth quarters, we began to see signs of broader economic uncertainty, a pronounced industry slowdown in our North American market, softness in our European market and intense price competition.”

Whirlpool said it was finalizing plans for the first phase of its global restructuring, announced last month. This is intended to enhance Whirlpool’s competitiveness and performance, as well as reinforce its capacity to invest in its brand-building strategies.

When fully implemented, the plan-which will be announced in phases during the next four quarters-is expected to eliminate 6,000 jobs worldwide and to save the company between $225 million and $250 million annually.

Full-year net earnings at Whirlpool were $367 million, down from core earnings of $407 million from continuing operations in the prior year.

Full-year sales hit $10.3 billion, down 2 percent from the $10.5 billion reported in 1999. Absent currency translation, which lowered sales by about $280 million, full-year sales would have been up 1 percent.

Whirlpool expects its first-quarter 2001 performance, excluding restructuring, to be in line with fourth-quarter 2000 earnings. Margin expansion is expected to enhance profitability in subsequent quarters.

For full-year 2001, Whirlpool anticipates that North American appliance industry unit shipments will be flat vs. 2000. During the second half, it expects improved performance in North America and Europe as a result of introductions of new, higher-margin products and from higher consumer demand levels, driven by a healthier worldwide economy and by a more favorable year-to-year comparison.