Higher Prices Lift Whirlpool -- WSJ
January 28 2020 - 3:02AM
Dow Jones News
By Austen Hufford
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (January 28, 2020).
Whirlpool Corp. said profit increased in the latest quarter
after it raised prices on some appliances, and raw-material cost
increases cooled.
Still, the company said on Monday that demand for some of its
products was weak in the fourth quarter. Revenue declined more than
analysts expected, falling 4.9% to $5.38 billion from a year
earlier.
Whirlpool posted increased profitability in North America, its
largest market, as higher prices and cost-cutting measures offset
lower volumes. The company sold 7.8 million products in North
America during the quarter, a 3.8% decline.
"Demand was down slightly," Whirlpool Financial Chief Jim Peters
said in an interview. "But it was right where we expected."
Shares rose 0.8% in after-hours trading to $149.40.
Whirlpool illustrates the varied effects tariffs can have on
U.S. manufacturers. The Trump administration put tariffs on import
washing machines in 2018 after Whirlpool requested protection from
what it called unfair foreign competition. U.S. consumers have seen
prices rise for washing machines because of the tariffs, according
to researchers.
But separate tariffs on imported steel and aluminum pushed up
Whirlpool's costs in recent quarters. Whirlpool expects costs
related to tariffs this year of about $12 million a month, similar
to 2019.
Mr. Peters said price increases for steel and resin started to
moderate over the course of last year.
Whirlpool also said earnings before interest, taxes and other
exclusions at its business in Europe, the Middle East and Africa
rose for the second straight quarter. The company has been working
to drive profitability at the unit by exiting some countries and
closing facilities.
Revenue for the company as a whole rose 1.2% after accounting
for currency movements and the lost revenue from the July sale of
its Embraco compressor business for about $1 billion.
Whirlpool posted a fourth-quarter profit of $288 million
compared with $170 million a year before. On an adjusted basis, the
company had a profit of $4.91 a share, up from $4.75 a year before
and above the $4.27 analysts expected.
The company expects to bring in a 2020 adjusted profit of $16.00
to $17.00 a share, in line with analyst expectations. Whirlpool
said it expects global demand for appliances to be largely flat
this year.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
January 28, 2020 02:47 ET (07:47 GMT)
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