Benton Harbor, Mich. — The global economic recession and soft demand for major appliances continued to take a toll on Whirlpool during the first quarter.
The world’s largest majap maker said profits fell 27 percent to $73 million and net sales declined 14 percent to $3.6 billion for the three months ending March 31.
Sales results included a positive impact from currency fluctuations, and dropped 23 percent year over year on a comparable currency basis.
Earnings were buoyed by cost reduction and productivity initiatives, a favorable mix of higher-margin products, an income tax benefit, and a $97 million pretax benefit related to changes in its retirement plan and accounting method.
But the gains were partially offset by higher material costs and substantially lower sales and production volumes, the company said.
“Whirlpool made significant progress in the execution of our key operational priorities during the first quarter,” noted chairman/CEO Jeff Fettig. “Despite the continued macroeconomic challenges, our results were positively impacted by previously announced cost savings actions and restructuring initiatives.”
In North America, sales fell 20 percent to $2.1 billion and declined 17 percent excluding currency fluctuations. Operating profit soared 273 percent to $164 million due to cost reductions, a favorable product mix and an $87 million gain from cutback in a retiree health savings account.
The gains were partially offset by sharply lower unit production volume, higher material costs and a $23 million expense related to Maytag recall costs.
Looking ahead, Whirlpool expects U.S. industry shipments to fall between 10 percent and 12 percent in units this year, up from a previous projection of 10 percent.
“As we had previously anticipated, global macroeconomic factors have remained negative and volatile during the first quarter,” Fettig said. “We remain focused on aggressively managing our cost structure and bringing best in class products and innovation to the marketplace.”
During the quarter, Whirlpool’s North America division introduced:
· the WhirlpoolResource Saver side-by-side refrigerator, which exceeds U.S. federal efficiency standards by more than 30 percent;
· the Whirlpool Cabriohigh-efficiency washer, which meets or exceeds CEE Tier III energy, the most stringent energy-level specifications for a top-load model;
· the Maytag JetClean dishwasher with a “silverwareblast” option that uses targeted spray jets for focused cleaning;
· Maytag side-by-side refrigerators with “fill-n-chill” dispensers that provide water and ice cubes concurrently from a single dispenser; and
· the KitchenAidSuperba series of EQdishwashers that deliver state-of-the-art cleaning, energy efficiency and noise reduction.