Whirlpool sees North America driving growth in 2016
Whirlpool Corp reported a better-than-expected quarterly profit and said consumer demand is likely to remain resilient in North America, its biggest market, this year.
Shares of the world’s largest maker of home appliances rose as much as 5.3 percent on Friday. An improving US economy has helped boost consumer spending in the country, even as economic uncertainty plagues emerging markets, particularly China and Brazil.
“Every piece of the drivers of demand – new housing, existing homes sales and discretionary (spending) – are going in the right direction. So, we view it as a very positive spot,” Chief Executive Jeff Fettig said on a conference call.
Whirlpool’s sales in North America rose about 4 percent to $2.9 billion in the quarter ended Dec. 31, accounting for about 52 percent of total sales. The company also forecast shipments to rise by 5 percent in the region this year.
“The region, which was the subject of most investor angst, was improved and better than expected, with margins up sequentially despite holiday promotions,” Raymond James Equity Research analyst Sam Darkatsh wrote in a note.
However, Whirlpool’s outlook for emerging markets was less than encouraging. Shipments in Europe, Middle East and Africa are expected to be flat to up 2 percent this year and fall 10 percent in Brazil, the company said.
Shipments in Asia are expected to remain flat. The company said it expected 2016 adjusted earnings of $14.00-$14.75 per share, compared with the average analyst estimate of $14.42 per share, according to Thomson Reuters I/B/E/S.
Whirlpool said its net earnings rose to $180 million, or $2.28 per share, in the fourth quarter, from $81 million, or $1.02 per share, a year earlier. Adjusted earnings came in at $4.10 per share, while net sales fell 7.4 percent to $5.56 billion.
Analysts on average had expected fourth-quarter earnings of $3.91 per share on revenue $5.74 billion.
Up to Thursday’s close, Whirlpool’s shares lost more than a third of their value in the past 12 months, underperforming the S&P 500 index. SPX, which declined 6.3 percent.