Whirlpool Profits Nearly Double
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Benton Harbor-based Whirlpool Corp. reported fourth quarter net income of $171 million, or $2.19 a share, up from $95 million, or $1.24 a share, in the fourth quarrter of 2009.
Sales of $5.04 billion increased 4 percent from $4.86 billion the fourth quarter of 2009.
Fourth-quarter operating profit totaled $202 million compared with $199 million in the prior year. Results were favorably impacted by cost reduction and productivity initiatives, increased monetization of certain tax credits, higher unit volume and lower incentive compensation. These favorable factors were offset by lower product price mix and higher material costs.
For the full year, 2010 net income was earnings were $619 million or $7.97 a share, up from $328 million or $4.34 a share for 2009. The company reported annual sales of $18.37 billion, up 7 percent from $17.10 billion in 2009. Excluding the impact of foreign currency translation, sales increased approximately 5 percent from the prior year.
“Delivering consumer-relevant innovations, managing costs and executing in the marketplace drove our improved performance in 2010,” said Jeff M. Fettig, Whirlpool chairman and CEO. “We improved our operating margins and strengthened our financial position for the year — all indicators that our brand-value creation strategy is working. As we enter 2011, we remain focused on delivering higher margin innovations, realizing significant cost productivity, and achieving profitable growth driven by some recovery in demand in the developed economies and by continued strong growth in many emerging markets. In 2011, we expect to expand our operating margins despite significant global inflation and generate good levels of free cash flow and further strengthen our financial position.”
During 2010, Whirlpool generated free cash flow of $502 million, down from $1.1 billion in the prior year.
In North America, fourth quarter sales were $2.6 billion, down 1 percent from a year earlier. Operating profit was $53 million, down from $136 million in the previous year. U.S. industry unit shipments of major appliances increased 4 percent during the fourth quarter. Results were unfavorably impacted by lower product price mix, higher material costs and lower production volume. These factors were partially offset by cost reduction and productivity initiatives and lower incentive compensation. Based on the current economic outlook, the company expects full-year 2011 U.S. industry unit shipments to increase between 2 percent and 3 percent.
Whirlpool Europe reported fourth-quarter sales of $922 million, a 4 percent decrease from the prior year. Excluding the effects of currency, sales increased approximately 4 percent. Overall industry unit demand during the quarter increased an estimated 2 percent compared with the prior year. The region reported an operating profit of $29 million during the fourth quarter compared to an operating profit of $19 million in the previous year. The year-over-year improvement was primarily the result of cost reduction and productivity initiatives as well as higher unit volumes. The improvement was partially offset by lower price-mix and higher material costs. The company expects full-year 2011 industry growth in the 2 to 4 percent range.
Whirlpool Latin America reported fourth-quarter net sales of $1.4 billion, an increase of 18 percent from the prior year. Excluding currency translation, sales increased approximately 17 percent. Operating profit totaled $193 billion in the fourth quarter compared with $138 million in the prior year. The improvement in profitability is primarily related to increased monetization of certain tax credits and cost reduction and productivity initiatives. These factors were partially offset by higher material costs, lower price mix and unfavorable foreign currency fluctuations. The company currently anticipates full-year 2011 Brazilian appliance shipments will increase approximately 5 to 10 percent.
Whirlpool Asia reported fourth-quarter sales of $204 million, up 9 percent from the prior year. Excluding the impact of currency, sales increased approximately 4 percent. Operating profit totaled $4 million during the fourth quarter of 2010 compared to $6 million in the prior year. The reduction in operating profit is primarily related to higher material costs. The company anticipates full-year 2011 industry unit shipments in Asia to increase approximately 6 to 8 percent.
For the full-year 2011, Whirlpool Corporation expects to report diluted earnings per share of $12 to $13. This outlook includes the impact of approximately $4 per share from U.S. energy tax credits the company expects to earn during 2011 as a result of recent tax legislation in the U.S. For the full year, the company expects to generate free cash flow between $400 million and $500 million. This outlook includes U.S. cash pension contributions of approximately $300 million.
“For 2011, we expect positive but uneven demand levels around the world. Raw material inflation is driving costs higher and we expect to mitigate these costs with improvements in cost productivity, innovation and recently announced price increases,” said Fettig.
Whirlpool is the world’s leading manufacturer and marketer of major home appliances, with 71,000 employees and 67 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world.
More at www.whirlpoolcorp.com.