Benton Harbor, Mich. - Weak sales, lower production and unfavorable exchange rates drove Whirlpool's second-quarter net earnings down 33 percent to $86 million.
The world's largest majap maker reported an 18 percent decline in net sales, to $4.2 billion, for the three months ending June 30. Excluding the impact of currency fluctuations, net sales declined 10 percent for the period.
Operating profit fell 34 percent to $134 million due to substantially lower global sales and production volumes, unfavorable foreign currency fluctuations, and lower monetization of certain tax credits, the company said. The decline was partially offset by cost cutting initiatives and a more profitable mix of higher-margin products.
"Consumer demand for appliances was significantly lower in the second quarter, which negatively impacted our global unit volumes," said Whirlpool chairman/CEO Jeff Fettig. "Late last year we took actions to restructure our business, aligning our capacity and resources to lower demand levels. Our results reflect these actions, and we will continue to execute our plans to address this volatile global economic environment."
Within North America, second-quarter sales fell 17 percent to $2.4 billion, or 14 percent excluding the impact of foreign currency fluctuations. The latter figure matches the overall decline in industrywide unit shipments during the three-month period, as reported by the Association of Home Appliance Manufacturers (AHAM).
Cost controls and a more profitable product mix helped boost operating profit 19 percent to $120 million in North America, although the gains were constrained by lower unit production volume and unfavorable exchange rates.
"While the demand environment remains a significant challenge, we are making strong progress in our key priorities" - including cost reduction, price/mix and lower working capital - "to offset the volume declines," Fettig said.
Based on current economic conditions, Whirlpool expects full-year 2009 U.S. industry unit shipments to decline between 10 percent and 12 percent, the company said.
Whirlpool introduced a range of new products in the North American market during the second quarter, including:
· a new Duet front-load laundry pair featuring heat and moisture detection sensors that improve dryer energy usage by 40 percent, and a "tumble fresh" washer setting that periodically tumbles clean clothes for up to six hours, reducing the potential for odor and wrinkles;
· a Whirlpool Latitude refrigerator with 10 percent more space in the refrigeration compartment compared to similar size side-by-side models; and
· a new collection ofbuilt-in Jenn-Air refrigerators, including side-by-sides, a 36-inch bottom-freezer, and a fully integrated, full-flush 42-inch French door bottom-freezer model that offers the widest interior space available in any flush refrigerator currently on the market, Whirlpool said.