Whirlpool Opens New Plant - Analyst Blog
April 12 2012 - 12:47PM
Zacks
Whirlpool Corporation (WHR) has opened a
million-square-feet facility in East Tennessee that will
manufacture premium cooking products. The new facility, replacing a
123-year-old plant at the same location, will add 130 jobs to the
company’s 1,500 people workforce.
The company has invested $200 million in the project. The
facility also includes a 400,000-square-foot distribution
center.
Whirlpool posted a profit of $2.62 per share for the fourth
quarter of 2011 compared with $171 million or $2.19 per share in
the same period last year. However, excluding special items,
profits decreased to 32 cents per share from 43 cents per share in
the fourth quarter of 2010. It was significantly lower than the
Zacks Consensus Estimate of $1.93 per share.
Sales in the quarter fell marginally to $4.9 billion from $5.0
billion as improving price/mix was offset by unfavorable currency
and lower industry demand. It was slightly lower than the Zacks
Consensus Estimate of $5.0 billion.
Sales in North America rose a meager 1% to $2.6 billion.
Operating profit improved to $202 million from $53 million in the
previous year. It was favorably affected by the implementation of
previously announced price increases and improved product mix that
more than offset lower industry volumes, higher material costs and
the impact from lower production volumes. Whirlpool expects U.S.
industry unit shipments to increase in the range of 0%–3% in
2012.
Whirlpool is considered the largest home-appliances manufacturer
in the world, ahead of
ElectroluxAB (ELUXY), LG, Samsung
and General Electric Co. (GE). The company is
placed among the leading home appliances makers in India and
Europe.
Despite its market-leading position, we are concerned about the
ongoing weakness in Europe and high customer concentration faced by
the company. The company’s large trade customers include
Sears Holdings Corporation (SHLD), Lowe’s
Companies Inc. (LOW), The Home Depot,
Inc. (HD), Casas Bahia, Best Buy Co. Inc.
(BBY) and Ikea, who have significant leverage as buyers.
As a result, the shares of Whirlpool are currently maintaining a
Zacks #3 Rank that translates into a Hold rating for the short term
(1 to 3 months).
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