Whirlpool stock advanced by more than 7-percent in early after hours trading this evening following second quarter earnings results which beat Wall Street expectations for both revenues and earnings per share, with the company citing a “resilient” second quarter despite the impact of the coronavirus pandemic.
Whirlpool Chairman & CEO Marc Bitzer told Yahoo Finance in an interview this afternoon that he is “cautiously optimistic” approaching the second half of the year after the appliance giant’s second quarter proved to be far better than his team had expected.
Whirlpool’s non-GAAP earnings per diluted share of $2.15 per share beat analyst’s estimates of $1.00 per share by $1.15. GAAP earnings per share clocked in a $0.55 per share.
Net sales of $4-billion in the quarter surpassed Wall Street estimates of $3.62-billion, and the company has reset guidance going forward as a result expecting full year net sales to decline by 10 to 15-percent where they had previously forecast a drop of 13-to-18-percent for the full year.
Bitzer says, “Delivering a solid Q2 performance despite the far reaching impact of COVID-19 on our business is the result of the decisive actions we took throughout the quarter and ultimately demonstrates the resilience of our business model,” and adds, “While we recognize the uncertainty and volatility which lies ahead of us, we are proud of the way in which we managed through the most difficult quarter of this global crisis.”
Whirlpool reported second quarter net income of $35-million or 55-cents per share, compared with $67-million, or $1.04 per share in the year-ago period. Revenue declined to $4.04-billion from $5.19-billion a year earlier, but Wall Street had been expecting a drop to $3.62-billion.
In early after hours trading, Whirlpool stock was up by more than 7-percent, but saw those gains trimmed within three hours to 4.15-percent. Prior to the market close, Whirlpool’s stock had risen some 2.2-percent on the day, closing at $146.89 per share.
Whirlpool report a very strong North America performance, expanding EBIT margins by 20 basis points to 12.6-percent. The company also reports significant demand recovery across all regions in the month of June, resulting in year-over-year global margin expansion in the month on a GAAP and ongoing basis.
Whirlpool officials say their COVID-19 response plan to protect margins and enhance liquidity in 2020 is on track, resulting in cost takeout (including raw material savings) of approximately $100-million in the second quarter and a cash balance of $2.5-billion as of June 30, 2020.
The second quarter GAAP net earnings margin was 0.9-percent, compared to 1.3-percent in the same prior-year period. Prior-year results were unfavorably impacted by a $79-million loss primarily related to the sale of the company’s South Africa business, partially offset by a $53- million gain related to a Brazil indirect tax credit and certain favorable tax items.
Ongoing EBIT margin was 5.2-percent, compared to 7.0-percent in the same prior-year period as COVID-19 related disruptions of nearly 300 basis points were mitigated by significant and decisive cost actions taken by the Benton Harbor-based manufacturer.
Jim Peters, Chief Financial Officer, says, “Our strong second-quarter results are a testament to our operational strength and the perseverance of our global team.” Peters adds, “In the quarter, we delivered solid cost takeout globally and strong cash flow improvement through disciplined working capital management. The actions we took earlier this year to sustain our margins and protect our liquidity strengthened our ability to succeed through the ongoing COVID-19 pandemic and have prepared us to withstand current economic uncertainty.”
