Whirlpool Continues To Benefit From Higher Prices
22 Octubre 2019 - 06:17PM
Noticias Dow Jones
By Austen Hufford
Whirlpool Corp. beat profit expectations as the company
continued to benefit from charging higher prices for its washing
machines.
In North America, the company's largest market, Whirlpool sold
6.9% fewer appliances in the third quarter, but at higher prices,
the company said Tuesday, leading to a 0.5% increase in revenue and
higher profitability for the region.
Whirlpool, like many manufacturers, has seen tariffs lead to
higher raw material costs.
The Trump administration imposed tariffs on washing machines
last year after the Benton Harbor, Mich.-based appliance
manufacturer requested protection from what it called unfair
foreign competition. But a separate set of tariffs on imported
steel and aluminum has led to an estimated $150 million increase in
costs this year, the company expects, compared with $300 million in
2018.
Whirlpool has used price increases in recent quarters, and other
means, to offset those higher costs.
"We saw ways to deal with them by either moving the supply base,
taking costs out or raising prices," Chief Executive Marc Bitzer
said in an interview.
Whirlpool has also been working to shore up profitability at its
business in Europe, the Middle East and Africa.
The company has been closing plants and cutting costs and is
focusing on kitchen products to help regain profitability in the
division. It also sold its business in South Africa and stopped
appliance sales in Turkey. The company expects about $200 million
in costs this year related to these efforts.
Mr. Bitzer said plans to fix the unit are working. "Europe is
getting almost to break even," he said.
Revenue for the company as a whole declined 4.4% to $5.09
billion from the comparable quarter a year ago, below the $5.13
billion expected by analysts polled by FactSet.
Revenue rose 1.6% when the impacts of currency and the lost
revenue from a division sale were accounted for. In July the
company completed the sale of its Embraco compressor business for
about $1 billion, which also boosted profit in the quarter.
The company posted a third-quarter profit of $358 million, or
$5.57 a share, compared with $210 million, or $3.22 a share, a year
before.
On an adjusted basis, the company had a profit per share of
$3.97, down from $4.55 a year before and above the $3.89 expected
by analysts.
The company reaffirmed its adjusted earnings expectations for
the year.
Shares fell 4% in after-hours trading Tuesday. The stock had
risen about 50% this year through the close of normal trading
hours.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 22, 2019 19:02 ET (23:02 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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