Whirlpool Corporation’s (WHR) lobbying expenses amounted to $200,000 million in the second quarter ended June 30, 2010. Though expenses reduced from $280,000 in the previous quarter, it increased by about $40,000 over the same quarter last year.
The amount was spent for lobbying the federal government mainly on appliance energy tax credits, energy standards, tariffs on microwaves and laundry work surfaces, pension funding as well as issues related to trading with Korea.
The recent global recession left Whirlpool with decreased demand from all over the world due to huge spending cut exercised by consumers. The housing industry was among the worst sufferers. Decrease in demand for homes automatically led to declining sale of home appliances.
But due to liberal federal policies and actions, markets showed satisfactory improvements in the first half of the year. The proposition of federal home buyer tax credit worth $8,000 also encouraged many customers to enter into home buying contracts leading to a huge improvement in sales.
Revenues of Whirlpool stood at $4.5 billion in the second quarter of 2010, up 9% from the year-ago quarter. Net earnings were $2.82 per share, much higher than 94 cents per share a year back. Whirlpool also beat the Zacks Consensus Estimate of $2.18 per share.
However, with the expiration of the tax credit in April, the situation deteriorated again. May and June of 2010 recorded the lowest home sales in the country since 1963, not a very flattering comparison for the industry. Since they are closely tied to the housing sector, linked industries including construction and home appliances will also face the backlash. Whirlpool’s lobbying spend is thus intended as a damage control measure.
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