Whirlpool Corporation 's ( WHR ) adjusted earnings
came in at $1.97 per share in the first quarter of 2013,
substantially higher than $1.41 in the year-ago period. It also
surpassed the Zacks Consensus Estimate of $1.95.
The robust quarterly performance was primarily driven by the
company's sustained focus on cost and capacity reduction
initiatives and favorable price and product mix. Moreover, reported
earnings jumped over twofold to $3.12 per share in the quarter from
$1.17 in the year-ago period.
Revenues in the quarter declined approximately 2.3% year over
year to $4,248.0 million, missing the Zacks Consensus Estimate of
$4,358.0 million. Despite a strong product price/mix, foreign
currency translation and lower monetization of Brazilian (BEFIEX)
tax credits weighed on the top line.
Gross profit improved 11.7% year over year to $726.0 million
from $650.0 million a year ago. Gross margin expanded 220 basis
points (bps) to 17.1% from 14.9% in the year-ago quarter. Adjusted
operating profit grew 21.2% to $280.0 million from $231.0 million
in the year-ago quarter. Consequently, adjusted operating margin
expanded 130 bps to 6.6% versus 5.3% in the first quarter of
Revenues from North America were flat year over year at
$2.2 billion. However, adjusted operating profit jumped 44.4% to
$218.0 million in the quarter from $151.0 million in first-quarter
2012. The year-over-year growth in operating profit was due to
better product price mix along with cost and capacity reduction
measures. Further, in view of the current economic scenario, the
company expects its U.S. industry shipments to increase in the
range of 2% - 3% in 2013.
Revenues from Latin America declined 7.7% to $1.2
billion on a year-over-year basis. However, excluding the effects
of currency translation and Brazilian tax credits, revenues grew
2.0% as a result of favorable product and price mix and increased
volumes. Adjusted operating income was flat year over year at
$114.0 million, as the benefits from favorable product price/mix
were fully offset by higher material costs. Further, the company
now expects appliance industry shipments in Latin America to grow
in the range of 3%-5% in 2013.
Revenues from Europe, Middle East and Africa dipped
2.8% to $668.0 million in the quarter due to the challenging
economic environment in Europe. The region reported an operating
loss of $8.0 million compared with an income of $4.0 million in the
year-ago quarter. Whirlpool expects industry unit shipments to
remain flat in 2013.
Revenues from Asia went down 7.4% to $187.0 million
from $202.0 million in first-quarter 2012. However, excluding the
negative impact of currency translation, revenues increased 4%.
Operating income plunged 66.7% to $3.0 million from $9.0 million in
the year-ago quarter as the benefit from favorable product and
price mix were fully offset by unfavorable foreign currency
translation, lower volumes and increased raw material costs. The
company now expects industry shipments in the region to increase
3%-5% in 2013.
Whirlpool had cash and cash equivalents of $750 million as of
Mar 31, 2013 compared with $1,168.0 million as of Dec 31, 2012.
Long-term debt was $2,441.0 million as of Mar 31, 2013 compared
with $1,944.0 million as of Dec 31, 2012.
The largest home-appliances manufacturer in the world, which
comes ahead of ElectroluxAB ( ELUXY ), LG, Samsung,
General Electric Co. ( GE ) and Haier
Electronics Group Company, Ltd . ( HRELY ), has a
negative cash flow of $305.0 million from operations in Mar 31,
2013 compared with $423.0 million in the prior-year period.
Meanwhile, capital expenditures decreased to $74.0 million from
$92.0 million in 2012. Currently, Whirlpool has a negative free
cash flow of $376.0 million and anticipates having free cash flow
in the range of $600.0 million-$650.0 million for 2013.
For full-year 2013, Whirlpool continues to expect earnings in the
range of $9.80 to $10.30 per share. However, excluding
restructuring charges and Brazilian tax credits, the company
anticipates earnings per share of $9.25 to $9.75.
Currently, Whirlpool carries a Zacks Rank #2 (Buy).AB ELECTROLUX (ELUXY): Get Free ReportGENL ELECTRIC (GE): Free Stock Analysis ReportHAIER ELECTRONC (HRELY): Get Free ReportWHIRLPOOL CORP (WHR): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment