(Bloomberg) — Whirlpool Corp. cut its full-year earnings forecast less than feared, sending shares up in late trading.
The KitchenAid owner now expects ongoing earnings per share, excluding some items, to be between $22 and $24 for the current year, which is $2 lower than the previous range. Analysts had forecast $23.91 for the year, according to estimates compiled by Bloomberg. Revenue is seen falling 6% in 2022, compared with prior guidance for growth of as much as 3%.
Appetite for appliances has dipped as decades-high inflation crimps consumers’ budgets and the US housing market softens. Supply-chain issues have abated somewhat, Chief Operating Officer Joe Liotine said, but getting components such as electronics remains a challenge.
The slowdown in consumer interest “was probably a little bit more abrupt or sudden than we had expected,” Whirlpool Chief Financial Officer Jim Peters said in an interview. Demand will likely remain suppressed through 2022, he said. But Whirlpool says key drivers, such as consumers’ need to replace aging appliances, bode well for the medium to long term.
Whirlpool’s second-quarter sales were $5.1 billion — shy of the $5.2 billion average of analyst estimates compiled by Bloomberg and down 4.3% from a year earlier. Supply-chain issues and a slowdown in demand drove the decline, the company said, with higher prices acting as an offset. Revenue for North America, the company’s largest market, was just under $3 billion, missing expectations.
Sales in Europe, the Middle East and Africa took a hit from the war in Ukraine, the company said. Whirlpool, which is based in Benton Harbor, Michigan, is undergoing a review of its business in the region as it seeks to focus on segments with high growth and margin potential. It announced the sale of its Russian operations in late June.
Second-quarter ongoing earnings per share were $5.97, ahead of the $5.24 average analyst estimate.
The appliance manufacturer maintained its full-year outlook for materials inflation at $1.5 billion to $1.75 billion, primarily driven by higher costs for steels and resins. The peak in the cost increases could come by the third quarter, Peters said.
Whirlpool shares rose 3.1% in extended trading at 4:15 p.m. New York time. The stock fell 25% in the 12 months through Monday’s close, more than double decline for the S&P 500 Index during that period.
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