Some stockholders aren't taking the news very well this morning in the wake of Whirlpool Corporation's second reduction in their earnings forecast and lower than expected quarterly profits announced today. Even before the market opened the appliance giant's stock was indicating down more than 4-percent in pre-market trade, and by mid-morning the stock had trimmed more than $20 for a more than 11.8-percent fade in fairly heavy trading.
The new full-year earnings forecast for net income is between $11.50 and $11.75 per share, down from the previous anticipated range of $12.00 to $12.50. It was the second time this year that the earnings forecast has been trimmed by the Benton Harbor-based manufacturer. The company is citing soft markets in the U.S. and Britain and pressures from the weakening British pound.
The company announced third-quarter GAAP net earnings of $238-million, or $3.10 per diluted share, compared to $235.00 or $2.95 per diluted share in the same period a year ago. Ongoing business earnings per diluted share totaled $3.66 compared to $3.45 in the same prior-year period. Wall Street analysts had expected those earnings to be around $3.86 per diluted share.
Chairman and CEO Jeff Fettig says, "In a challenging external environment, we delivered record third-quarter ongoing earnings per share by leveraging our portfolio of leading brands, innovative new products and a continued focus on cost productivity. The fundamentals of our business are strong, and as a result of our operational execution we have delivered earnings per share growth of 18-percent year-to-date."
Net sales in the third quarter clocked in at $5.2-billion, compared to $5.3-billion in the same period a year ago, however, excluding the impact of currency, sales increased slightly.
Market watchers contend that the company's third quarter profit and sales both missed expectations, and with the reduced earnings guidance the pressure on the street was taking its toll this morning. Additionally, with Whirlpool adjusting earnings per share expectations to the $14.00 to $14.25 range, against the street consensus projection of $14.61 per share, the report triggered fast and early trading to the under $150.50 off more than $20 per share from yesterday's close of more than $170 per share.
Whirlpool President & Chief Operating Officer Marc Bitzer said, "We are pleased with strong revenue growth, market share gains and ongoing margin expansion in North America and Latin America that overcame industry softness and currency volatility." He added, "In Europe, the U.K. environment remains challenging, but we continue to execute brand and product transitions while adjusting our production levels to right-size our inventory. In Asia, we remain focused on deploying our products across our new, larger distribution network,"
CEO Fettig adds, "We are confident that our previously deployed plans will deliver a record year of performance with strong revenue growth and margin expansion as we manage through continued challenges in a volatile global environment." He adds, "Our long-term strategic priorities remain unchanged and we will continue to deliver shareholder value through the execution of our priorities and a balanced approach to capital allocation."
Through Monday Whirlpool's stock had risen some 16-percent.
Whirlpool expects full-year shipments of products to rise between 3 and 4-percent, while in Europe, the Middle East and Africa are expected to be flat to up 2-percent. Shipments in Asia are projected to be flat to down 2-percent. U.S. shipments are targeted to increase by 3 to 4-percent for the full year.
