By Chris Nicholls
MICHIGAN: Whirlpool Corporation has reported slow results in the second quarter, with earnings from continuing operations down US$44 million on the same time last year and profit down the same amount.
Earnings for the quarter came to US$117 million, down 27 percent from $161 million last year, with profit down to US$203 million from US$247 million last year.
The world’s largest whitegoods company, Whirlpool blamed much of the drop in “significantly higher” material and oil-related costs, as well as on lower US industry unit volume and increased restructuring costs.
Revenue looked more positive, though, at US$5.1 billion, compared with $4.9 billion in the second quarter of 2007.
Despite the figures, Whirlpool Corporation chief executive, Jeff Fettig, said, “Whirlpool made solid progress toward improving operating results from first-quarter levels despite an increasingly challenging economic environment.
“The cost inflation facing our business is significant, and we continue to take steps to address this challenge,” he said.
Productivity initiatives and improved results within the company’s Latin American operations also offset some of the pain, said Fettig.
Whirlpool Asia also fared well, reporting sales of US$178 million, a nine per cent increase on last year. However, this appeared to be down mostly to increased sales in India.
The region’s profit more than doubled as well, to US$5 million compared with US$2 million last year.
Europe also reported positive results, with a 17 per cent increase in sales to US$1.1 billion, although operating costs increased US$50 million.
Proving how large an impact the US market’s woes had, the North American unit’s sales of $2.9 billion dropped four percent from the prior year, with a US$78 million drop in operating profit.
Fettig said Whirlpool hoped to combat these issues by continuing with cost-cutting measures and “other productivity initiatives”.
For the full-year 2008, Whirlpool said it continues to expect earnings per diluted share from continuing operations to be in the US$7.00 to $7.50 range and to generate US$500 million to $550 million in free cash flow.