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Analyst Downgrades Whirlpool After '09 Guidance

The Associated Press

HARTFORD, Conn. (AP) — Shares of Whirlpool Corp. fell Tuesday, a day after the world's largest manufacturer of stoves, refrigerators and other major home appliances said first-quarter profit fell 28 percent.

Analyst Sam Darkatsh of Raymond James & Associates Inc. downgraded the Benton Harbor, Mich., company Tuesday to "market Perform" from "outperform."

He cited Whirlpool's stock's "recent and rapid approach" to his $45 price target and 2009 earnings guidance "that suggests operating results well below prior expectations."

Whirlpool maintained its outlook Monday for a 2009 profit of $3 to $4 per share, above analysts' expectations for full-year earnings of $2.78 per share.

However, Darkatsh said the guidance is helped by about $1 per share in "non-operating items, decreasing earnings quality in our view."

"While we still maintain that the long-term earnings power exceeds $10 per share, we believe that the recent steep rise in the shares, combined with still-deteriorating demand trends, present a more balanced risk-reward ratio at present," he said.

Whirlpool's share price has more than doubled since early March.

The maker of Maytag and KitchenAid appliances and the company's namesake brand said profit fell to $68 million, or 91 cents per share, from $94 million, or $1.22 per share, a year earlier.

Sales dropped 23 percent to $3.57 billion from $4.6 billion a year earlier in part because its products were more expensive to overseas customers as a result of the stronger dollar.

Darkatsh said the results, "while admittedly only one quarter, showed solid performance in a very challenging period of brutal demand, retail inventory rationalization, production cuts, a strong dollar, and year-over-year raw-material inflation."

Many of the factors should moderate the year progresses, at least giving credence to the existing and reiterated $3.00-4.00 EPS guidance, he said.

Whirlpool's shares fell $1.97, or 4.5 percent, to $41.72 in afternoon trading.