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Whirlpool Posts Solid Quarter, Cuts Outlook

The appliance maker warns that the economy will hurt its full-year results.


(WHR) - Get Whirlpool Corporation Report

posted solid first-quarter earnings but cut its full-year outlook because of the weak economy.

The appliance maker said quarterly profit beat analysts' estimates, helped by North American sales, but that future earnings will be affected by an expected decrease in shipments.

Whirlpool earned $91 million, or $1.32 a share, compared with last year's loss of $529 million, or $7.32 a share, including one-time charges and restructuring charges. Excluding charges, the company earned $1.32 in the first quarter of 2002. Analysts were expecting $1.29 a share for the current quarter.

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"Our businesses delivered a solid performance for the quarter, despite uncertainty in global markets and generally weak industry demand," said David R. Whitwam, Whirlpool's chief executive. "Our operations significantly improved productivity and lowered costs, which helped partially offset year-over-year increases in pension, health care, energy and material costs."

Sales were $2.7 billion, up 6% from last year's $2.57 billion. The company's North American sales rose 5% to $1.8 billion.

Looking ahead, Whitwam said, "Based on our revised industry outlook for Whirlpool's key markets around the world, we are revising full-year earnings-per-share guidance to $5.90 to $6.10." The company had previously forecast full-year 2003 earnings of $6.20 to $6.40 a share. Analysts expect $5.96 a share.

"We continue to see uncertain economic and geopolitical environments in most markets in which we operate," Whitwam said. The company now expects full-year European industry shipments to decline 3% from last year's level, after previously forecasting a decline of 1% to 2%. Whirlpool expects full-year Latin American industry unit shipments to decline 3% to 5% from last year's level, whereas it had previously forecast flat industry shipments. Whirlpool continues to expect, however, that Asian full-year industry shipments will be flat to slightly up from last year's level.

Shares of the Benton Harbor, Mich.-based company were recently up 1.5% at $54.46 after falling 2.7% to $52.21 in morning trading.