) recorded an increase in adjusted net income to $1.41 per share
for the first quarter of 2012 from 64 cents in the same period last
year, beating the Zacks Consensus Estimate of $1.12. However,
before adjustments, net income slumped 46% to $92 million, or $1.17
per share in the quarter, from $169 million, or $2.17 in the first
quarter of 2011.
Revenues in the quarter fell marginally to $4.35 billion from
$4.4 billion as improving product price/mix was offset by
unfavorable currency, lower industry demand and lower monetization
of tax credits. Revenues were slightly lower than the Zacks
Consensus Estimate of $4.37 billion.
Operating profit (adjusted) rose 42% to $232 million from $163
million in the first quarter of 2011. The significant increase in
operating income was a result of continued improvement in price
mix, cost reduction and capacity reduction measures.
Revenues in North America fell 1% to $2.2 billion from the first
quarter of 2011. Operating profit improved to $151 million from $52
million in the previous year. It was favorably affected by the
implementation of previously announced price increases, improved
product mix and cost and capacity reduction efforts that more than
offset the impact of lower industry volumes and higher material
costs. Whirlpool expects U.S. industry unit shipments to increase
in the lower end of 0%-3% in 2012.
Revenues in Europe, Middle East and Africa fell 8% to $688
million. The region had an operating profit of $5 million in the
quarter compared to $25 million in the prior-year period.
The decline in operating profit was attributable to the ongoing
financial crisis in Europe, which led to weak consumer demand
across the Euro zone, higher material costs and lower production in
order to adjust to lower industry demand. As a result, the company
expects industry unit shipments to decrease in the range of 2%-5%
Revenues in Latin America increased 3% to $1.3 billion.
Operating profit decreased to $121 million compared with $174
million in the previous year quarter as favorable product price/mix
and current productivity initiatives was offset by lower
monetization of tax credits, higher material costs and unfavorable
currency. However, the company expects appliance industry shipments
in the region to increase towards the higher end of 2%-5% for
Revenues in Asia decreased 3% to $202 million. Operating profit
in the quarter went down to $9 million from $11 million in the
first quarter of 2011 as favorable product price/mix, volume growth
and continuing productivity measures were more than offset by
higher material costs and unfavorable currency. However, the
company expects industry unit shipments in Asia to increase at the
low-end of its previous guidance of 2%-4% in 2012.
Whirlpool had cash and cash equivalents of $583 million as of
March 31, 2012 compared with $1.0 billion as of March 31, 2011.
Long-term debt was $1.6 billion as of March 31, 2012 compared with
$2.2 billion as of March 31, 2011.
The company used cash flow of $423 million in operations in the
quarter compared with $224 million in the same period last year.
Meanwhile, capital expenditures decreased to $92 million from $115
million in the first quarter of 2011.
Free cash flow in the quarter slipped deeper into the red --
$515 million compared with $336 million in the year-ago period. For
full-year 2012, Whirlpool expects to generate free cash flow
between $100 million and $150 million.
For full year 2012, Whirlpool expects to report earnings per
share of $5.00 to $5.50. However, excluding restructuring charges
and Brazilian tax credits, the company anticipates earnings per
share of $6.50 to $7.00.
Whirlpool is considered the largest home-appliances manufacturer
in the world, ahead of
), LG, Samsung and
General Electric Co.
). The company is placed among the leading home appliances makers
in India and Europe.
Whirlpool's cost and capacity reduction initiatives are
noteworthy, resulting in improved margins. However, we are
concerned about the ongoing weakness in Europe, a region where it
expects sales to decline this year.
As a result, Whirlpool currently retains a Zacks #3 Rank,
reflecting a short-term (1 to 3 months) Hold rating and we have a
long-term (more than 6 months) recommendation of Neutral on the
GENL ELECTRIC (
): Free Stock Analysis Report
WHIRLPOOL CORP (
): Free Stock Analysis Report
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