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Whirlpool 3Q profit falls as US demand falters

Wed, 10/27/2010 - 9:05am

Whirlpool Corp., the world's biggest appliance maker, said Wednesday that price competition pulled its third-quarter revenue and shipments down 3 percent in the U.S. and kept revenue nearly flat worldwide, compared with a year earlier.

The maker of Maytag, KitchenAid, Jenn-Air, Whirlpool and store-brand appliances saw demand rebound last winter with the arrival of federal rebates on energy-efficient appliances. And it still expects U.S. shipments to rise 3 percent overall for the year.

But that's down from an earlier company forecast for a 5 percent increase, and Whirlpool shares fell $3.80, or 4.5 percent, to $80.70 in afternoon trading.

The company's third-quarter earnings fell 9 percent as it tried to keep pace with rivals such as LG and Samsung.

Brian Sozzi of Wall Street Strategies Inc. said three factors put Whirlpool in a "downdraft in the U.S." in the third quarter: allegations that mortgage lenders cut corners on foreclosures; soft midyear housing data and falling demand with the end of the tax credit and rebates.

CEO Jeff Fettig said weak performance in Europe and, especially, the U.S. offset strong performances in Latin America and Asia and kept revenue for the three months that ended Sept. 30 at $4.52 billion.

The figure topped the average forecast of analysts polled by Thomson Reuters for revenue of $4.49 billion.

The company said it earned $79 million, or $1.02 per share, in the quarter, compared with $87 million, or $1.15 per share, a year earlier.

Excluding the $1.20-per-share cost of settling federal price-fixing charges, Whirlpool earned $2.22 per share. That adjusted figure was much higher than the average forecast for $1.76 per share from analysts polled by Thomson Reuters, who usually remove one-time items.

The U.S. Justice Department announced in September that a Whirlpool subsidiary and Japanese electronics giant Panasonic Corp. both agreed to plead guilty and pay more than $140 million in criminal fines for their roles in a scheme to fix refrigerant compressor prices.

Whirlpool, based in Benton Harbor, Mich., said rising material costs also weighed on results and partially offset the company's cost-cutting and improved productivity.

Whirlpool maintained its full-year earnings outlook of $9.56 to $10.06 per share. Chief Financial Officer Roy Templin said during the call that the company expects lower prices for the rest of the year.

Whirlpool has 67 manufacturing plants and technology research centers around the world.

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