NEW YORK — Greater manufacturing efficiencies and a richer mix of high-margin products helped Whirlpool and Electrolux achieve double-digit profit hikes amid more modest sales gains in the third quarter.
The earnings spikes also came despite higher costs for retooling refrigerator lines to meet tougher new Department of Energy (DOE) efficiency standards that went into effect in September.
For Whirlpool, net income increased 17.3 percent to $230 million for the three months, ended Sept. 30, while net sales edged up 3 percent to $4.8 billion. In North America, net sales rose 6.3 percent to $2.8 billion, and operating profit hit a third-quarter record of $304 million, or about 11 percent of sales.
Chairman/CEO Jeff Fettig attributed the quarterly results to “disciplined management of our operations” and continued investment in brands and innovation. Nevertheless, the numbers came in below analyst forecasts, sending Whirlpool shares lower after the earnings announcement.
At Electrolux, improved U.S. demand helped drive a 6 percent increase in net sales to SEK28.8 billion while net soared 42 percent to SEK933 million for the three months, ended Sept. 30.
In North America, net sales rose 11.3 percent to SEK9.1 billion, driven by favorable exchange rates and greater demand for premium cooking, laundry and dishwashers. However, results were curtailed by significant declines in AC and freezer sales during the mild summer, and refrigerator shipments were impacted by a changeover to new, higher-efficiency models. Both factors took a toll on operating income, which fell 8 percent to SEK518 million.
In a statement, president/CEO Keith McLoughlin described the DOE-mandated product upgrades as “major transitions” that have been “slower and more complex than anticipated.” However, he said sales growth in North America remains healthy, and that the region’s majap business “continues to deliver results with a good contribution to the [company’s] earnings.”
For its part, Whirlpool projected U.S. industry shipments to increase 5 percent for the full year.