Whirlpool Corporation Earnings Call Nuggets: Market Share Community and Market Share Details
Market Share Community
Sam Darkatsh – Raymond James & Associates, Inc.: Couple of questions, first off, I apologize if this was in the prepared remarks and I missed it. Was there market share commentary around Latin America and Europe? I missed it if there was.
Michael A. Todman – President, Whirlpool International: Sam, this is Mike. No, I didn’t make market share commentary, but in Latin America, actually our market share was stable, so we maintain, and in Europe actually we saw a slight increase in our market share.
Sam Darkatsh – Raymond James & Associates, Inc.: Then my primary question. You said that you are expecting sales growth to build as the year progresses in North America and Latin America. Could you decompose that a bit into units versus price mix as the year progresses? And then, the follow-up to that would be how do you see market share playing out in United States particularly if industry pricing gets little bit more challenging?
Jeff M. Fettig – Chairman and CEO: Sam, this is Jeff. Let me take that at a global level. First of all, we had – our Q1 revenues were basically flat when you take our foreign currency and we’ve been – the big currency devaluations happened in March and early April of last year. So, we kind of anniversaried those things, and given today’s currency levels, that should not be a drag on revenues. The second thing, I would say is, if you step back and look at the global appliance business at a global level, you know largely speaking, the Q1 was probably marginally slightly better or slightly worse than it has been in the last six to nine months, meaning there has been no real material change in the global market. The individual markets, there has been a lot of change, some up, some down. So, we’re kind of tracking at the rate we’ve been, the activities we’ve been putting in place have been expanding margins, and we continue to ramp up investments in new product innovations. So, our comments are that with revenues as essence being flat in the first quarter, we do expect revenue growth to begin to ramp up as we go out through the year. If you look at our demand forecast, you can see that largely speaking, we still expect it to be positive, and I think you will see our new product innovations working well in the marketplace. So, that’s why we’re sitting here today feeling good about our revenue growth opportunities. Specifically in North America, I’ll let Marc speak to that…
Marc Bitzer – President, North America: Sam, it’s Marc Bitzer. I made earlier comment about the revenue growth which we’re expecting, and it’s first of all, as you know we are not giving revenue or price mix guidance by regions. So, let me try to be vague (within) these guard rails. First of all on revenue growth, I wouldn’t say I expected, if we don’t see trend supporting that, and if we don’t have a strong degree of confidence, that revenue growth will materialize, and we are very confident. Obviously, and particularly as you compare year-to-year, revenue numbers and also as you keep in mind we are (cycling) through several price increases, mix changes, but based on comparison change and as such the price volume equation by definition will change, it just reflects from base line and what we are doing about this one. I think important thing and that’s what’s probably (indiscernible) in your question is, based on the past industry trends we have not changed our view on promotional policy. We feel based on what happens in this first quarter that our view has been confirmed as evidenced by the operating margins. I’d also say that we remain committed to our strong margins and margin expansions and that has also been evident in Q4 and Q1. We are playing now with more and more levers. In the past we would play strongly in the price margins, now its price margin and costs. And we are increasing also will have volume opportunities. And that ultimately will support our margin expansion.
Michael A. Todman – President, Whirlpool International: Sam, let me give you a little bit of color on Latin America. If we just remember and I had this in the prepared remarks the first quarter was the toughest comp quarter for Latin America and so in general the industry is down because it was up so high last year because of the IPI tax. The first quarter of the IPI tax introduction and then the change in IPI tax but our expectations is that the demand environment in Brazil in fact is going to grow and we are already seeing that in April as we begin to comp over slightly lower numbers from last year and we see positive trends in the economic environment.
Larry Venturelli – EVP and CFO: If you look at the guidance we provided throughout the year which everybody is reiterating today. If you look at just the industry guidance by itself would indicate, 2.5% approximately improvement in unit volume, which would translate into at least that amount of sales for the year to answer your question.
Sam Darkatsh – Raymond James & Associates, Inc.: If I could sneak one more in here real quick. Marc, you mentioned that U.S. POS was less than that of the sell-in. Do you anticipate a bit of a correction or a softer Q2 as a result of that versus what we saw in Q1 for the industry?
Marc Bitzer – President, North America: Sam, it’s Marc again. First we explain what I mentioned about Q1. As we entered the first quarter of the industry the trade inventory levels were low. I would say, unusually low and that was largely driven by the uncertainty which was around the fiscal cliff and everything else in December. As the quarter progressed, I would say both consumers and trade confidence, in particular trade confidence, increased and inventory levels went up coupled – or I would say particularly also driven there as you know there have been some retail landscape changes and there were some new brands and plots, which always drives some initial loads of inventory. That’s just the nature whenever you have new flowing. That was an unusual Q1 expect the underlying sell-through data, which as you know there’s no solid source available, but we have a pretty good sense about this one is, I would say, almost spot on what we had in mind to our full year guidance. I also see that pretty stable to maybe slightly increasing as the year progresses and for Q2 it feels stable right now compared by Q1 trends, not stable in absolute terms.
Market Share Details
Eric Bosshard – Cleveland Research Company: Curious for you to speak a little bit more, you clearly are committed in making great progress on margins. I’m interested in how you are thinking about market share relative to that? I know you’ve talked in the past of some decisions you’ve made on market share relative to margin, but interested in how you are thinking your commitment to that and also within the market share performance, if you are seeing changes at any different piece of the market at the high end relative to the low end within your performance, and if you have different strategies or thoughts about defending or pursuing market share across the portfolio, specifically talking about North America?
Marc Bitzer – President, North America: Eric, again it’s Marc Bitzer. First of all, just to provide fact, as I indicated already, our Q1 markets share was year-over-year down and sequentially slightly up which pretty much confirms our current trend and the decision which we’ve taken in Q4. Obviously I can’t give quality guidance on market share, but let me try to maybe put it more in generic terms. The way how we look at market share, there is a certain portion, I think it’s portion of our market share which I call is everyday earned in the (trade slope) for great product. As you can imagine, we are exceptionally committed for great and innovative products that are met every day, and we will work incredible hard to never let that go. There is another portion of the market, which is call it promotion market share, which sometimes is maybe like quicksand, and you need to make a decision, A, how big is that. In the past couple of years, we’ve said, we don’t believe that promotional markets were big, and two what return on investment do I get, i.e. how much does it cost me to buy that market share in simple terms. I’m simplifying, and that is where we have not changed our view on this one. But don’t confuse as us not being committed to drive our markets shares with great product in innovative products. We remain exceptionally committed and will remain so…
Jeff M. Fettig – Chairman and CEO: Eric, I would just add to that. I mean we are investing in what we think the saleable market share which is new product innovation, and where we’ve brought out really great new product innovation, we are actually gaining market share. To Marc’s point, you know we do not believe if you look at the elements that construct demand in the marketplace, it’s primarily replacement. We are now seeing a really nice growth factor in new construction. We are starting to see the pickup from existing home sales. But the pure, pure discretionary is still very weak. And given in that environment we don’t think what I call uneconomical promotions drives anymore demand. So that’s the same position we’ve had for some time now and it’s in this position we have today.
Eric Bosshard – Cleveland Research Company: I guess just a follow-up. I totally understand your comment that uneconomical promotions don’t drive demand. But they may influence market share and so what I am curious is as you have seen LG and Samsung going to Depot and Lowe’s. How that is impacting your market share there and how you are seeing the landscape change. I know you have also won market share at Home Depot with the Whirlpool brand. But my follow-up is how you are seeing that market share position evolve as those new players have arrived?
Jeff M. Fettig – Chairman and CEO: You know again Eric I’m not going to speak about competitors. But if you look at the last couple of years, when there were these heavy promotions we would lose some share and a month or two months later we’d be right back to where we are, so we think it’s transitory and I haven’t seen any change in environment today.
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