Historical Stock Chart
2 Months : From Oct 2019 to Dec 2019
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 email@example.com
(END) Dow Jones Newswires
October 22, 2019 19:02 ET (23:02 GMT)
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