Whirlpool’s 3Q profit rises 13 percent

Whirlpool’s 3Q profit rises 13 percent
 
Date October 20, 2005
Section(s) Local News
Brief  
 
BENTON HARBOR, Mich. (AP) — Appliance maker Whirlpool Corp., which is buying rival Maytag Corp., today said earnings for the third quarter rose 13 percent despite higher costs for raw materials.

Net income increased to $114 million, or $1.66 per share, from $101 million, or $1.50 per share, a year earlier. The net income beat the average estimate of $1.62 per share from analysts surveyed by Thomson Financial.

Sales rose 9 percent to $3.6 billion from $3.32 billion.

Whirlpool, the No. 1 home appliance maker in the U.S., said material and oil-related costs totaled $110 million in the latest quarter. Higher restructuring and compensation costs, and unfavorable currency translation also hurt results for the quarter. These factors were offset by price increases, cost-control initiatives and productivity improvements, Whirlpool said.

“The combination of actions we began implementing last year to address the significantly higher material and oil-related cost environment have proven to be effective,” said Jeff M. Fettig, the company’s chairman, president and chief executive officer. “These actions included driving higher levels of controllable productivity, leveraging our global operating platform, reducing non-product-related spending, accelerating the rate of innovation to the market and implementing cost-based price adjustments.”

The Benton Harbor-based company’s sales in North America rose 10 percent to $2.3 billion, while sales in Europe increased 4 percent to $811 million, or 3 percent excluding currency translation. Sales in Latin America were up 5 percent.

Whirlpool maintained its forecast for full-year earnings of $5.90 to $6.10 per share. The company continues to expect full-year material and oil-related costs to be at the high end of a range of $500 million to $550 million.

Analysts are expecting the company to post a full-year profit of $6.01 per share.

“We expect continued positive year-over-year earnings expansion during the fourth quarter,” Fettig said. “Our positive sales momentum, strong demand for our branded product innovation, productivity initiatives and strong cost controls are expected to offset the unfavorable material and oil-related cost environment.”

Whirlpool agreed in August to buy Maytag with a cash and stock bid of about $1.7 billion, topping an offer by an investor group headed by Ripplewood Holdings LLC.

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