NEW YORK – Sales edged up for Whirlpool and Electrolux during the first quarter, although their earnings results and U.S. market forecasts differed.
For Whirlpool, net earnings slid 36.5 percent to $160 million for the three months, ended March 31, amid higher material costs and capital investments, while net sales rose 4.8 percent to $4.2 billion.
In North America, net sales increased 4 percent to $2.3 billion and operating profit rose 4.6 percent to $228 million, or 9.8 percent of sales. Increased investments in marketing, technology and products were offset by higher volume and ongoing productivity improvements, the manufacturer said.
“We are very pleased with the progress we made in the first-quarter driving revenue growth, expanding margins and investing in our business,” chairman/CEO Jeff Fettig said in a statement.
First-quarter highlights included the introduction of a Whirlpool-branded true convection microwave ovenhood combination with an exclusive popcorn cycle that uses sound sensors to adjust cooking time automatically for perfectly popped kernels.
Whirlpool also continued to expand its countertop appliance business, adding seven-, nine-, 11- and 14- cup models to its ExactSlice line of KitchenAid food processors in the U.S.
Looking ahead, the company expects total U.S. industry shipments to rise between 5 and 7 percent for all of 2014, compared with last year’s 5.1 percent increase. Whirlpool also anticipates generating full-year free cash flow of about $700 million, and investing upwards of $675 million in capital improvements.
“We remain committed to delivering our operating profit margin, earnings per share and free cash flow guidance for the year,” Fettig said.
Meanwhile, rising white-goods demand led by a sales resurgence in Europe helped drive Electrolux’s sales and earnings higher in the first quarter.
Net income increased 19.3 percent to 431 million krona while net sales edged up 1 percent to 25.6 billion krona, the company reported.
In North America sales were essentially flat, down 0.2 percent to 7.6 billion krona, and operating income fell 16.4 percent to 382 million krona, due to extreme winter weather in January and February, and unfavorable currency fluctuations.
But demand rebounded strongly in March, the manufacturer reported, and price increases and higher sales of cooking products and refrigerators helped offset the negative impact of exchange rates.
“Our operations in North America were negatively affected by the harsh weather conditions in early 2014,” said Electrolux president/CEO Keith McLoughlin. “However, the underlying performance remains solid with a very strong recovery in March.”
McLoughlin said he remains confident that the North American market will continue its recovery, but unlike Whirlpool pegged full-year majap industry growth at a slower 4 percent rate in the U.S.
McLoughlin added that the company’s North American product mix will continue tilting toward the more profitable premium segment, and that Electrolux will maintain its efforts to cut costs, optimize its global production structure and increase the pace of innovative product launches.
The brutal winter stymied home and majap sales, but both appear poised for renewed growth.