Whirlpool, Electrolux Enjoy Solid Third-Quarter Results

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Acquisitions and a strong performance in North America respectively helped Whirlpool and Electrolux post solid numbers in the third quarter.

Boosted by last year’s Indesit (Italy) and Hefei Sanyo (China) acquisitions, Whirlpool, already the world’s largest majap maker, showed a 9 percent increase in net sales, to a record $5.3 billion for the three months ending Sept. 30. Excluding the impact of unfavorable currency exchange rates, sales increased nearly 25 percent.

Net earnings edged up 2.2 percent to $235 million, driven by the benefits of acquisition integration activities and cost- and capacity-reduction initiatives, the company said, as well as ongoing cost productivity and a more marginrich mix of products.

In North America, net sales were flat at $2.8 billion, and rose 3 percent excluding currency fluctuations. However, operating profit was up nearly 15 percent to $349 million, and ongoing business segment operating profit hit a record $336 million, or 12 percent of sales, compared with last year’s 10.9 percent of sales.

Whirlpool attributed the glad tidings to the ongoing cost productivity plus favorable raw materials costs, which together more than offset the impact of unfavorable exchange rates and increased investments in marketing, technology and products.

“We are pleased with the strong financial results we delivered in the third quarter,” chairman/CEO said Jeff Fettig. “Our operating plans and focused execution delivered another quarter of record revenues, operating profit and earnings in spite of a challenging operating environment in several key emerging markets.”

The company is also projecting a 5-percent increase in full-year majap unit shipments industrywide in the U.S., over 2014.

Separately, Marc Bitzer, who ran Whirlpool’s North American and European businesses as vice chairman, was promoted to president and COO last month and given a seat on the board, while co-vice chairman and 22- year company veteran Mike Todman confirmed plans to retire at year’s end.

For Electrolux, net sales rose 2.1 percent for the three months, ended Sept. 30, but were up 8.7 percent, to 31.3 billion SEK, including acquisitions but excluding the negative effect of currency fluctuations.

Net income similarly increased 9 percent, to 1 billion SEK, on strength in North America. There, industry unit shipments rose 8 percent for the quarter, and were up 10 percent including microwave ovens and room air conditioners.

Company sales on the continent increased 7 percent to 11.6 billion SEK for the quarter, reflecting strength across most product categories. Operating income was also up, rising 16.2 percent to 743 million SEK, thanks to the higher sales volumes and a return to profitability in refrigeration following last year’s hit from the U.S. Energy Department’s higher new efficiency requirements.

The company also said it is continuing to ramp up and increase production efficiencies at its new Memphis, Tenn., cooking plant.

In a statement, president/CEO Keith McLoughlin projected U.S. majap industry unit growth at 4 percent to 6 percent for the full year.

In an update on the manufacturer’s pending $3.3 billion acquisition of GE Appliances, McLoughlin said his company is prepared to challenge the Justice Department’s antitrust suit in court this month, while “continuing to explore the possibility of a reasonable settlement.”


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