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Whirlpool’s Q2 Profits Fall 33%

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

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.