Whirlpool Corporation hit a big bump in the road on Wall Street, following Thursday’s Q3 Conference Call and quarterly earnings report. Chairman Mark Bitzer and CFO Jim Peters delivered optimistic assessments on sales, profits, and shareholder return. On most of the measurements, Whirlpool ‘beat the street’, as the term goes, turning in better quarterly numbers than had been predicted by the stock watchers.
However, after the conference call, several Wall Street analysts expressed doubt about Whirlpool’s ability to live up to the company leaders’ predictions and warned of financial storm clouds ahead for the Benton Harbor based appliance giant.
The result was a ‘drubbing’ of Whirlpool’s stock price—down almost 15 % in Thursday trading and another 3-plus % in Friday morning trading. WHR stood at approximately $102 per share at noon Friday. The price dropped to $98.40 at one point in morning trading.
Contrast this with a $160 per share high point during the past year and a five year high of nearly $258. The price drop yesterday was the largest single day loss of value since the start of the Covid pandemic in March, 2020, when virtually the entire stock market crashed as the nation shut down.
Appliance industry analysts Sam Darkatsh and Joshua Wilson of Raymond James, who rate shares at Market Perform, weighed in on the WHR earnings report with these comments:
“Whirlpool’s headline 3Q EPS meaningfully benefited from tax, while price/mix headwinds and lower net cost benefits drove margin below expectations.” The pair wrote in a report Wednesday after the earnings were released. “4Q appears to be impacted by similar pressures and implied 4Q EPS guidance missed.”
Essentially, they are saying that while Whirlpool may have had a relatively strong Q3, it faces rough sledding ahead in Q4 and beyond. Much of Whirlpool’s stronger Q3 was driven by favorable results in the North American appliance market, which makes up a huge segment of Whirlpool’s worldwide performance. The analyst questions seem to zero-in on whether the company can maintain that momentum amid economic conditions and competitive pressure.
Two different views of the same numbers. Only time will tell—and MoodyOnTheMarket.com will continue to closely monitor what’s happening with Southwest Michigan’s most important employer.
By Gayle Olson, MOTM Contributor
