) adjusted earnings per share came in at $2.20 in the first
quarter of 2014, way below the Zacks Consensus Estimate of
$2.30. However, the reported figure was up 11.7% from the
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The year-over-year improvement was primarily driven by the
company's sustained focus on cost and capacity reduction and
revenue growth. However, reported earnings fell 35.3% year over
year to $2.02 per share.
Revenues in the quarter increased 2.7% year over year to $4,363.0
million. The top-line growth was primarily attributable to
increased demand for the company's innovative products.
Europe, the Middle East and Africa (EMEA)
contributed significantly to total revenue.
Moreover, Whirlpool registered year-over-year sales growth of
nearly 6%, after excluding the impact of foreign currency
translation and lower monetization of Brazilian (BEFIEX) tax
credits. The company's revenues surpassed the Zacks Consensus
Estimate of $4,222.0 million.
Gross profit improved 4.0% year over year to $755.0 million.
Gross margin increased 20 basis points (bps) to 17.3%. Adjusted
operating profit rose 7.9% to $302.0 million. Consequently,
adjusted operating margin expanded 30 bps to 6.9% versus 6.6% in
the first quarter of 2013.
Q1 Regional Performance
grew 4.5% year over year at $2.3 billion. Operating profit
increased 4.6% to $228.0 million in the quarter.
The year-over-year growth in operating profit was due to higher
sales and better cost productivity, which was partly offset by
increased material costs and investments in marketing, technology
and products. Going ahead, the company expects its U.S. industry
shipments to increase by 5%-7% in fiscal 2014.
were $1.2 billion, remaining flat year over year. Moreover,
excluding the effects of currency translation and Brazilian tax
credits, revenues were up over 11%. Adjusted operating income was
down 4.4% to $109.0 million, as increased material costs and
unfavorable foreign currency exchange rate more than offset
higher sales, better product price and mix as well as cost
productivity initiatives. The company expects flat appliance
industry shipments in Latin America in fiscal 2014.
grew 7.8% to $720.0 million in the quarter. First-quarter
adjusted operating income for the region was $7.0 million, as
against operating loss of $8.0 million in the year-ago quarter,
benefiting from higher sales as well as cost and capacity
reduction measures. Whirlpool expects industry unit shipments in
fiscal 2014 to range between flat to a 2% increase.
fell 11.2% to $166.0 million in the first-quarter of 2014.
Excluding the negative impact of currency translation, revenues
fell nearly 4%. Operating income rose 66.7% year over year to
$5.0 million as the benefit from improved product price and mix,
along with ongoing cost productivity initiatives, more than
offset the higher material costs, unfavorable foreign currency
translation and lower unit volumes. The company expects industry
shipments in the region to range from flat to a 3% increase in
Whirlpool had cash and cash equivalents of $1,672.0 million as of
Mar 31, 2014, compared with $1,380.0 million as of Dec 31, 2013.
Long-term debt was $2,662.0 million as of Mar 31, 2014 against
$1,846.0 million as of Dec 31, 2013.
This largest home-appliances manufacturer in the world, which
comes ahead of ElectroluxAB, LG, Samsung,
General Electric Co.
) and Haier Electronics Group Company Ltd., reported cash used in
investing activities of $339.0 million in the first quarter of
2014. Meanwhile, the company spent $123.0 million toward capital
expenditure during the year. Currently, Whirlpool has a negative
free cash flow of $456.0 million.
Whirlpool has reiterated its guidance for 2014. For full-year
2014, the company expects earnings per share (on a GAAP basis) in
the range of $11.05-$11.55. However, considering the impact of
restructuring charges, Brazilian tax credits and investment
expenses, adjusted earnings per share are anticipated to be
Moreover, for 2014, the company expects to generate $700 million
of free cash flow.
Other Stocks That Warrant a Look
Currently, Whirlpool carries a Zacks Rank #3 (Hold). However,
some better-ranked retail stocks include
Rite Aid Corp.
). Rite Aid sports a Zacks Rank#1 (Strong Buy) while Aarons has a
Zacks Rank #2 (Buy).