Whirlpool Profits from Higher Prices--2nd Update

Date : 01/28/2020 @ 12:17AM
Source : Dow Jones News

Whirlpool Profits from Higher Prices--2nd Update

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By Austen Hufford 

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 27, 2020 19:02 ET (00:02 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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