Whirlpool Corporation (WHR) revealed a more than threefold increase in profit to $2.51 per share (before special items) in the first quarter, compared to 73 cents (before special items) a year ago. The manufacturer of home appliances also outperformed the Zacks Consensus Estimate of $1.30 per share.
Sales in the quarter rose 20% to $4.3 billion. Excluding the impact of foreign exchange translation, the increase was 11%. Unit shipments increased 18% globally. The adjusted operating profit went up to $287 million from $126 million in the previous year.
The improvement in results was due to an increase in unit shipments, cost reduction actions and initiatives to enhance productivity. These favorable factors were partially offset by a lower product price/mix.
Whirlpool raised its earnings per share guidance to $8.00–$8.50 for full year 2010, compared to its prior guidance of $6.50–$7.00.
Regional Performance
Sales in North America rose 7% to $2.3 billion. Excluding the impact of foreign exchange translation, sales increased 5%. Unit shipments rose 11% in the region. The adjusted operating profit increased to $140 million from $100 million in the prior year. The company expects industry unit shipments for full year 2010 to increase 3%–5%, compared to the previous guidance of 2%–4%.
Sales in Europe inched higher by 6% to $739 million. However, sales decreased 2% excluding the currency effects. Unit shipments were flat compared to the previous year. The adjusted operating profit was $27 million, compared to the breakeven results in the year-ago period. The company anticipates industry European unit shipments for full year 2010 to be flat compared to year-ago levels.
Sales in Latin America shot up 65% to $1.1 billion. Excluding the currency impacts, sales increased 40%. Adjusted operating profit increased to $167 million from $83 million in the prior year quarter. The company expects industry shipments of Brazilian appliance in the region to increase 10% for full year 2010, compared to the previous outlook of an increase of 5%–10%.
Sales in Asia sprang up 60% to $192 million. Excluding the currency effects, the sales increased 49%. Adjusted operating profit rose to $11 million from $5 million in the previous year. The company anticipates industry unit shipments in the region to grow 5%–8%, compared to the previous guidance of 3%–5%.
Financial Position
Whirlpool had cash and cash equivalents of $1.2 billion as of March 31, 2009, compared to $1.4 billion as of December 31, 2009. Long-term debt amounted to $2.8 billion as of March 31 2009. Long-term debt-to-capitalization ratio stood at 43%.
In the quarter, Whirlpool had a net cash flow of $71 million from operating activities, compared to an outflow of $272 million in the 2009 quarter. Meanwhile, capital expenditures increased to $146 million from $112 million in the year-ago period.
The company generated free cash outflow of $74 million compared to $371 million in the year-ago quarter. The company expects to generate free cash flow of $500 million–$600 million, up from the previous outlook of $400 million–$500 million.
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