Whirlpool Corporation Reports Strong First-Quarter 2019 Results

Posted by Whirlpool Corporation

Whirlpool Corporation announced first-quarter GAAP net earnings of $471 million, or $7.31 per diluted share, compared to $94 million, or $1.30 per diluted share, reported for the same prior-year period, primarily driven by certain favorable tax-related items. First-quarter ongoing earnings per diluted share(1) were $3.11, compared to $2.81 in the same prior-year period.

“We delivered another strong quarter with margin expansion and record first-quarter earnings per share despite a soft demand environment in several countries,” said Marc Bitzer, chairman and chief executive officer of Whirlpool Corporation. “Successful execution of price increases and sustained focus on cost discipline drove very positive results in the first quarter, and provide confidence in our ability to deliver our full-year financial goals.”

First-quarter net sales were $4.8 billion, compared to $4.9 billion in the same prior-year period. Excluding the impact of currency, sales increased 1.0 percent.

First-quarter earnings before interest and taxes (EBIT)(2 were $393 million, or 8.3 percent of sales, compared to $151 million, or 3.1 percent of sales, in the same prior-year period, primarily driven by a Brazil indirect tax credit and lower restructuring costs. First-quarter ongoing EBIT(2 was $298 million, or 6.3 percent of sales, compared to $295 million, or 6.0 percent of sales, in the same prior-year period. On a GAAP and ongoing basis, EBIT margin was favorably impacted by product price/mix and restructuring benefits, which were partially offset by higher cost inflation, unfavorable productivity related to lower unit volumes and currency.

For the three months ended March 31, 2019, the Company reported cash used by operating activities of $(895) million, compared to $(713) million in the prior year. The Company reported free cash flow(4) of $(969) million for the first three months of 2019, compared to $(756) million for the first three months of 2018, primarily driven by temporarily higher inventory in North America and the timing of certain payments.

First-quarter Regional Review

Whirlpool North America

Whirlpool North America reported first-quarter net sales of $2.5 billion, compared to $2.5 billion in the same prior-year period. Excluding the impact of currency, sales increased 1.1 percent.

The region reported first-quarter EBIT of $312 million, or 12.3 percent of sales, compared to $288 million, or 11.4 percent of sales, in the same prior-year period. During the quarter, the favorable impacts of product price/mix were partially offset by cost inflation and lower unit volumes.

Whirlpool EuropeMiddle East and Africa

Whirlpool EuropeMiddle East and Africa reported first-quarter net sales of $1.0 billion, compared to $1.1 billion in the same prior-year period. Excluding the impact of currency, sales increased 1.6 percent.

The region reported first-quarter EBIT of $(21) million, or (2.1) percent of sales, compared to $(27) million, or (2.5) percent of sales, in the same prior-year period. During the quarter, the favorable impacts of restructuring benefits and unit volume growth were partially offset by lower production levels and inventory liquidation costs in Turkey.

Whirlpool Latin America

Whirlpool Latin America reported first-quarter net sales of $875 million, compared to $898 million in the same prior-year period. Excluding the impact of currency, sales increased 6.7 percent.

The region reported first-quarter EBIT of $45 million, or 5.1 percent of sales, compared to $57 million, or 6.3 percent of sales, in the same prior-year period. During the quarter, the favorable impacts of product price/mix and unit volume growth offset unfavorable currency; prior-period results were positively impacted by the monetization of approximately $22 million in certain tax credits.

Whirlpool Asia

Whirlpool Asia reported first-quarter net sales of $371 million, compared to $448 million in the same prior-year period. Excluding the impact of currency, sales decreased 11.5 percent.

The region reported first-quarter EBIT(3) of $7 million, or 1.9 percent of sales, compared to $19 million, or 4.2 percent of sales, in the same prior-year period. During the quarter, the favorable impact of product price/mix was more than offset by lower unit volumes and related unfavorable productivity in China.

Outlook

For the full-year 2019, the Company now expects GAAP earnings per diluted share of $14.05 to $15.05 and continues to expect ongoing earnings per diluted share(1) of $14.00 to $15.00. On a GAAP basis, earnings per diluted share includes restructuring expense of approximately $100 million, divestiture related transition costs of approximately $23 million and the favorable impact of a Brazil indirect tax credit of $127 million.

For the full-year 2019(5), the Company continues to expect to generate cash provided by operating activities of $1.4 billion to $1.5 billion and free cash flow(4) of $800 million to $900 million. Included in this guidance are restructuring cash outlays of approximately $100 million and, with respect to free cash flow(4), capital spending of approximately $625 million.

“In addition to our seasonal cash usage in the first quarter, we increased our quarterly dividend for the seventh consecutive year and repurchased additional common stock,” said Jim Peters, chief financial officer of Whirlpool Corporation. “We are on track to meet our strong earnings and cash flow guidance for the year, which will allow us to fully invest in our business, strengthen our balance sheet and return strong levels of cash to shareholders.”―TV Veopar Journal Bureau

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