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Weak demand, higher costs hurt Whirlpool

Tags: Whirlpool

Whirlpool Corp. (WHR-N), the world's largest appliance maker, reported a drop in quarterly sales on Wednesday, hurt by a stronger dollar and weak global demand.

The maker of Maytag and KitchenAid appliance saw a drop in unit shipments to mature markets such as North America and Europe, as well as Latin America. Asian unit shipments remained flat from a year earlier.

High raw materials costs also hurt Whirlpool in the fourth quarter, when sales fell to $4.9 billion US from $5.0 billion a year earlier.

"We are assuming relatively flat to slightly improving industry demand during the year and have planned our business accordingly," Chief Executive Officer Jeff Fettig said.

Whirlpool also seems to have lost market share in washers to Korean manufacturers, which discounted aggressively in the key holiday selling season, analysts have said.

The century-old American manufacturer alleges South Korean producers such as Samsung Electronics and LG Electronics are selling residential washing machines in the United States at prices 31 percent to 82 percent below fair market value, the Commerce Department has said.

Whirlpool also accuses Mexican suppliers of undercutting U.S. prices by 27 percent to 72 percent.

The company's net earnings rose to $205 million, or $2.62 a share, from $171 million, or $2.19 a share, a year earlier. Excluding special items, it earned only 32 cents a share.

Whirlpool is now focusing on cutting costs and production capacity, and implementing previously announced price increases to offset tepid demand across the globe. It is also betting on high-tech and energy-efficient appliances.

For 2012, Whirlpool sees full-year earnings of $5.00 to $5.50 a share. Excluding restructuring charges and Brazilian tax credits, it forecasts the profit at $6.50 to $7.00. CTV Two CTV News CTV News Channel BNN - Business News Network CP24