Whirlpool shares slump on earnings miss
An ugly price-fixing fine and weakness in North America and Europe sales hit earnings. Results in Latin America and Asia are strong.
Shares of appliance maker Whirlpool (WHR) were down sharply today after one-time charges from an antitrust case and weak sales in North America and Europe hurt third-quarter results.
Sales in North America were lower and flat in Europe. But sales in Latin America and Asia were higher, reflecting strong economies.
Revenue was $4.5 billion, in line with estimates and up slightly from a year ago.
Excluding one-time charges, the company earned $2.22 a share, up from $1.67 a share a year ago.
Whirlpool expects 2010 adjusted earnings between $9.56 and $10.06 per share. It previously lifted its guidance to a range of $9 to $9.50 in July.
Nonetheless, shares were down 3.7% to $81.37 this afternoon. They had been down as much as 7.9% early in the session.
North American sales were down 3% to $2.4 billion, although shipments were up 1%. The results reflected the weak economy. Whirlpool and other appliance makers are benefit strongly from new-home construction, which boosts demand for new appliances.
European sales were off 8% to $827 million. Excluding currency translation, sales were flat. Sales in Latin America were up 13%, with Asian sales up 21%.
The biggest problem for the company was a $1.20-a-share charge related to settling an antitrust case. The company's Embraco North America subsidiary and Panasonic (PC) pleaded guilty to conspiring to fix prices on refrigerant compressors between 2004 and 2007.
Embraco, which has a 25% share in the market for refrigerant compressors, agreed to a $91.5 million fine. Panasonic was to pay $49.1 million.
Refrigerant compressors are used to cool refrigerators and compressors.
Whirlpool shares are flat on the year but have had a fairly wild ride. They jumped to as high as $118.44 in April, then tumbled as much as 40% before bottoming at $71 on Sept. 13. They're up 13.2% since.
When was the last Whirlpool appliance manufactured in the US? How many Mexican and Chinese workers have jobs making those products, which are for export to the US market? Of course, the retail market for household applicances is down now because few new houses are being built.
If US workers don't have jobs, they can't buy imported durable goods.
Footnote: I was in Las Vegas NV recently. Like new appliances from home foreclosures going for little more than it would cost to get them hauled to the dump. This puts a squeeze on new replacement appliance sales.
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