Whirlpool Corp Earnings Cheat Sheet: Higher Expenses Shrinks Margins

On top of dropping to a loss in the second quarter, S&P 500 (NYSE:SPY) component Whirlpool Corporation (NYSE:WHR) also came in short of analyst estimates. Whirlpool Corporation manufactures and markets appliances and products for home use. It makes washers, dryers, refrigerators, air conditioners, dishwashers, freezers, microwave ovens, ranges, trash compactors and air purifiers.

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Whirlpool Earnings Cheat Sheet for the Second Quarter

Results: Swung to a loss of $161 ($2.10 per diluted share) in the quarter. Whirlpool Corporation had a net income of $205 million or $2.64 per share in the year earlier quarter.

Revenue: Rose 4.3% to $4.73 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: WHR fell short of the mean analyst estimate of $2.72 per share. Analysts were expecting revenue of $4.77 billion.

Quoting Management: “While the challenging economic environment has kept us from achieving our targeted margins, we delivered a solid quarter,” said Jeff M. Fettig, Whirlpool Corporation chairman and chief executive officer. “Our continued cost and productivity initiatives coupled with strong product innovation have helped mitigate a volatile demand environment and record levels of material cost inflation. Additionally, our recently announced price increases in key countries around the world help position us for stronger second half performance.”

Key Stats:

Gross margin shrank 2.6 percentage points to 14.1%. The contraction appeared to be driven by increased costs, which rose 7.6% from the year earlier quarter while revenue rose 4.3%.

Revenue has risen the past four quarters. Revenue increased 3% to $4.4 billion in the first quarter. The figure rose 3.6% in the fourth quarter of the last fiscal year from the year earlier and climbed 0.5% in the third quarter of the last fiscal year from the year-ago quarter.

WHR’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $169 million in the first quarter, a profit of $171 million in the fourth quarter of the last fiscal year and $79 million in the third of the last fiscal year.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of $2.11 versus a mean estimate of net income of $1.62 per share.

Competitors to Watch: General Electric (NYSE:GE), Siemens (NYSE:SI), Indesit Company SpA (NYSE:IND).

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(Source: Xignite Financials)