Whirlpool Leaders face the financial press Tuesday morning after an apparent executive shakeup that has President/COO Joseph Liotine leaving the company and Chairman/CEO Marc Bitzer picking up Liotine’s responsibilities, at least in the short term.
Whirlpool reported a bumpy 4th Quarter of 2022, with sales off significantly, but pointed at successful cost cutting measures that helped moderate the effect on profit and shareholder return.
Looking ahead, CEO Marc Bitzer says the company is well positioned for 2023:
“In 2023 we will reset our cost structure and expect to deliver $800 – $900 million of cost benefit” said Marc Bitzer, chairman and chief executive officer of Whirlpool Corporation. “This new cost structure, combined with the expected demand recovery during the second half of the year has Whirlpool well positioned to deliver sustained shareholder value.”
MARC BITZER
Chief Financial Officer Jim Peters says Whirlpool has used its cash resources wisely and made strategic moves in its worldwide investment portfolio of related companies to strengthen its position for 2023 operations:
” During 2022, we took decisive actions to accelerate our long-term growth trajectory by investing in our business and executing our portfolio transformation while also returning $1.3B in cash to shareholders,” said Jim Peters, chief financial officer of Whirlpool Corporation. “The strength of our balance sheet has allowed us to execute on our capital allocation priorities, and we continue to maintain flexibility with $2B of cash on hand as we exit the year.”
JIM PETERS
Peters and Bitzer made their assessments based on these ‘headlines’ coming out of Whirlpool’s 4th Quarter Report, issued after the Monday stock market close and prior to their scheduled Conference Call Tuesday morning with Wall Street analysts.
QUARTERLY HIGHLIGHTS
Net sales decline of (15.3)%, organic net sales(4) decline of (10.8)%, impacted by one-off supply disruption in North America and demand slowdown, partially offset by favorable price/mix
Strong cost actions on track, delivering sequential quarterly net cost improvement
The Company adjusted its full-year effective GAAP and adjusted (non-GAAP) tax rate to approximately (22)% and 4%, respectively, in the quarter
FULL-YEAR 2023 OUTLOOK
Expect full-year 2023 revenues of approximately $19.4 billion (down 1 to 2 percent compared to the prior year)
Earnings per diluted share of $16.00 to $18.00 on a GAAP and ongoing basis(2)
Cash provided by operating activities of approximately $1.4 billion and free cash flow(3) of approximately $800 million
GAAP and adjusted (non-GAAP) tax rate of 14 to 16 percent
PORTFOLIO TRANSFORMATION UPDATE
Strategic Review of EMEA (Europe, Middle East, Asia)
Strategic review of EMEA business concluded
Announced agreement to contribute European major domestic appliance (MDA) business into a newly formed entity with Arçelik A.Ş(6)
Creates over €6 billion revenue European MDA platform(6) with over €200 million of cost synergies
Transaction expected to close in second half of 2023, subject to additional requirements for closing, including obtaining regulatory approvals and other customary closing conditions
InSinkErator (newly acquired Whirlpool operating division)
InSinkErator acquisition closed in the fourth quarter of 2022, with no material impact to the fourth quarter results
MoodyOnTheMarket.com will monitor the Whirlpool 4th Quarter Conference Call Tuesday morning and report the highlights mid-morning. Local reporters are particularly interested in Marc Bitzer’s comments on President Joe Liotine’s abrupt departure from the company.
