Whirlpool Corp said on Monday its 2019 adjusted profit and revenue are likely to rise less than analysts’ expectations due to a higher tax bill, costs and a strong dollar, sending its shares down 6.5 percent after the bell.
Whirlpool has been grappling with high costs as a trade dispute between United States and China have made imported steel and aluminum more expensive, forcing it to raise prices for its washing machines and kitchen appliances.
The company said it expects about USD 300 million more in expenses due to higher import duty on raw materials used in its appliances. A higher tax rate is also expected to reduce its full-year earnings by 30 cents per share, the company said.
Whirlpool’s disappointing forecasts follows weak guidance from industrial bellwether Caterpillar and chipmaker Nvidia, both of which blamed slowing demand from world’s No.2 economy, China.
The company said it expects 2019 adjusted profit to be in the range of USD 14 to USD 15 per share compared with analysts’ expectation of USD 15.99 and revenue of USD 20.3 billion, below Wall Street estimate of USD 20.76 billion, according to IBES data from Refinitiv.
The company said higher raw material costs and tariffs resulted in softer demand in North America, its biggest segment. But still, sales in the region grew about 7 percent to USD 3.10 billion.
However, weak demand in Europe, Middle East and Africa pulled down its overall net sales by about 0.7 percent to USD 5.66 billion, missing analyst average estimate of USD 5.76 billion.
In October, the U.S. manufacturer had said it would exit a number of loss-making businesses in Europe in a bid to restore profitability.
In a post-earnings presentation, the company said it expected “uncertain external environment and volatility to continue”.
The company’s fourth-quarter profit beat analysts’ estimates, boosted by higher margins in North America. Excluding items, it earned USD 4.75 per share and beat the analyst average estimate of USD 4.23 per share.
Shares of the Michigan-based company, owner of brands including KitchenAid and Maytag, were trading lower at USD 116.39. The stock has lost nearly 32 percent of its value over the last one year.―Reuters