Whirlpool Corporation’s 1st quarter numbers are in and they have missed Wall Street expectations despite better than 3.7-percent revenue growth year-over-year. Additionally, the company has revised its full-year earnings guidance downward once again, dropping below market expectations on that front as well. The earnings report was released an hour after the market had closed for the day, and — perhaps based on a whisper number of $2.70 per share — the stock rose on the day by just under 2-percent, closing up $3.29 to $174.80 per share.
The reality of the numbers however, showed Whirlpool’s first quarter ongoing business earnings per diluted share totaled $2.50 as compared to $2.63 a year earlier, and against the backdrop of consensus earnings estimates on the street of $2.65 per share. So they missed Wall Street markers by .15 per share. One analyst firm (Zacks) notes that it marks the fourth quarter out of the last five that the company has surprised Wall Street with negative earnings figures against what had been expected.
First quarter net earnings weighed in at $153-million, or $2.01 per diluted share, compared to $150-million, or $1.92 per share in the same quarter last year.
Whirlpool Chairman & CEO Jeff Fettig says, “We made progress toward our goals of revenue growth and free cash flow generation, with strong growth and margin expansion in North America and Latin America.” He adds, “As we continue to execute our plans and work through the elevated complexity of our European integration, we remain confident in our ability to deliver both $1-billion of free cash flow and record earnings per share in 2017.”
Nevertheless, the company revised earnings expectations, shifting their outlook downward. For the full year of 2017, “as a result of temporary integration challenges in the EMEA region, Whirlpool Corporation now expects GAAP earnings per diluted share of $12.65 to $13.40 and ongoing business earnings per diluted share of $14.75 to $15.50. That’s down from previous earnings guidance which the company had set in the range of $15.25 to $16.25 per share, and the current consensus earnings estimate of $15.59 per share on Wall Street for the year ending December 31, 2017.
First quarter net sales were $4.8-billion, compared to $4.6-billion in the same prior-year period. When you exclude the impact of currency, sales increased by 3-percent.
First quarter operating profit totaled $264-million, or 5.5-percent of sales, compared to $285-million, or 6.2-percent of sales in the same prior-year period.
Meanwhile, first quarter ongoing business operating profit totaled $310-million, or $6.5-percent of sales, compared to $341-million, or 7.4-percent of sales in the same period a year ago. Cost productivity and unit volume growth partially offset the unfavorable impact from product price/mix and raw material inflation.
For Whirlpool North America first quarter net sales came to $2.6-billion, compared to $2.4-billion in the same period a year ago, which results in a sales increase of 7-percent when you back out the impact of currency. They expect full year 2017 industry shipments in the U.S. to increase by 4 to 6-percent.
In Europe, the Middle East and Africa, first quarter net sales of $1.0-billion, compared to $1.2-billion a year earlier resulted in a 9-percent sales decrease when you factor our currency. That region experienced peak integration complexity due to headquarters integration among other items. They now expect the year’s unit shipments to be flat to up some 2-percent in the region.
Whirlpool’s Latin American performance saw first quarter net sales of $818-million, compared to $705-million a year earlier for a sales increase of 4-percent after currency is factored out. Full year industry shipments in Brazil are expected to be flat.
Whirlpool Asia shows first quarter sale of $419-million, compared to $371-million a year earlier for a 16-percent sales increase once currency factors are removed. Full year unit shipments there are expected to be flat to up some 2-percent.
Whirlpool President & Chief Operating Officer Marc Bitzer says, “We continue to adapt our operating plans globally in a dynamic external environment, and our strong performance in North America and Latin America clearly demonstrates our ability to create value in challenging environments.” He adds, “While 2017 is the most complex of our European integration, we remain confident that we will complete key elements of the integration and deliver profitable growth in Europe this year.”
