‘Strong’ quarter for Whirlpool despite EMEA losses

US appliance giant Whirlpool has reported “strong momentum” in its Q2 2019 financial results to June 30, despite losses incurred in the Europe, Middle East and Africa (EMEA) region.

Whirlpool Corporation reported second-quarter net sales globally of $5.2 billion (£4.18bn), up 3% (excluding currency variations) on the $5.1bn in the same quarter last year.

On that turnover figure, Whirlpool Corporation declared a profit (EBIT) of $254 million (£204m), compared with a loss of $562m for Q2 2018. It said that prior-year results were negatively impacted by a £860m asset impairment charge related to the EMEA region and a settlement with the French Competition Authority (FCA)

Commenting on the results, Marc Bitzer, chairman and chief executive of Whirlpool Corporation, said: “At our recent Investor Day, we laid out a robust strategy for creating shareholder value and our excellent second-quarter results impressively demonstrate that we are on track. Our strong momentum allows us to raise our full-year guidance despite continued global macro uncertainties.”

Marc Bitzer
Marc Bitzer, chairman and CEO, Whirlpool Corpartion

Jim Peters, chief financial officer of Whirlpool Corporation, added: “As we strengthen our balance sheet, drive margin expansion and generate cash, we will maintain our disciplined approach to capital allocation with continued investments in our business and solid returns to our shareholders.”

For the full-year 2019, the company raised its guidance for its anticipated earnings per share (EPS) from $14 – $15 to $14.75 – $15.50 and upped its net sales guidance figure by $0.3bn to £20.6bn with an annual organic growth prediction of 3%.

Breaking the results down by region, Whirlpool North America reported net sales of $2.9bn – up from £2.8bn in Q2 last year, with EBIT profits of $353m, compared with $331m in Q2 2018. It attributed this to a favourable impact of product price/mix, offset partly by lower unit volume and cost inflation.

Latin America upped sales from $855m to $888m with profits up from $33m to $56m, while in Asia sales were up from $428m to $430m with profits down from Q2 2018’s $43m at $15m this year.

But it was the EMEA region that fared poorest. Q2 net sales were down from $1.1bn to $1bn, while the $25m loss of Q2 2018 deepened to $28m this year.

Digging deeper into the report, it is interesting to see a cost figure of $12m attributed to “legacy product warranty and liability expense”. Explaining this figure, the footnote reveals: “In September 2015, the company recorded a liability related to a corrective action affecting certain legacy Indesit products. During the second quarter of 2019, the company incurred approximately $12 million of additional product warranty expense related to our previously disclosed legacy Indesit dryer corrective action campaign in the UK.”

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