BENTON HARBOR, MI -- Whirlpool Corporation announced third-quarter net earnings of $79 million, compared to $87 million during the same period last year. Third-quarter operating profit totaled $234 million compared with $189 million in the prior year. Results were favorably impacted by cost reduction and productivity initiatives and increased monetization of certain tax credits. These favorable factors were partially offset by higher material costs and lower product price/mix. Third-quarter adjusted operating profit totaled $234 million compared to $193 million in the prior year.
"As expected, we faced a challenging environment during the quarter which resulted in a significant slowing in sales growth compared to the first half of the year," said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. "Our ongoing focus on cost reductions, productivity and innovative new product launches continues to enable us to adapt to changes in the macroeconomic environment."
Third-Quarter Regional Review
Whirlpool North America
Third-quarter sales of $2.4 billion decreased 3 percent from the prior year. North America unit shipments increased approximately 1 percent. U.S. industry unit shipments of major appliances (T7)(4) decreased 3 percent during the third quarter.
Third-quarter 2010 adjusted operating profit(2) for the North America region totaled $114 million compared to $147 million in the prior year. Third-quarter results were unfavorably impacted by lower product price/mix and higher material costs. These factors were partially offset by favorable cost reduction and productivity initiatives. Based on the current economic outlook, the company now expects full-year 2010 U.S. industry unit shipments to increase approximately 3 percent compared to the previous expectation of a 5 percent increase.
Whirlpool Europe reported third-quarter sales of $827 million, an 8 percent decrease from the prior year. Excluding the effects of currency, sales were approximately equal to the prior year. Overall industry unit demand during the quarter increased approximately 3 to 4 percent compared with the prior year.
The region reported an operating profit of $26 million during the third quarter compared to an operating profit of $14 million in the previous year. The year-over-year improvement was primarily the result of successful cost reduction and productivity initiatives. The improvement was partially offset by lower price/mix and higher material costs.
The company now expects full-year 2010 industry growth in the 1 to 3 percent range compared to the prior expectation of flat demand.
Whirlpool Latin America
Whirlpool Latin America reported third-quarter net sales of $1.1 billion, an increase of 13 percent from the prior year. Excluding currency translation, sales increased approximately 9 percent.
Operating profit totaled $143 million in the third quarter compared with $93 million in the prior year. The improvement in profitability is primarily related to increased monetization of certain tax credits, cost reductions and productivity initiatives. These factors were partially offset by higher material costs and lower price/mix. The company continues to anticipate full-year 2010 Brazilian appliance shipments will increase approximately 10 percent.
Whirlpool Asia reported third-quarter sales of $195 million, increasing 21 percent from the prior year. Excluding the impact of currency, sales increased 16 percent. .
The company now expects full-year 2010 industry unit shipments in Asia to increase 8 to 10 percent compared to the previous expectation of a 5 to 8 percent increase.
For the full-year 2010, Whirlpool Corporation expects reported earnings per diluted share between $7.80 and $8.30. On an adjusted basis, the company's outlook is between $9.56 to $10.06 per share. For the full year, the company continues to expect to generate free cash flow(3) of approximately $550 million to $650 million. The company's earnings and free cash flow projections are based upon current economic forecasts and business plans.
"As we have previously noted, we continue to see a volatile and rapidly changing global economy, which we expect to continue in the near term," said Fettig. "The actions we have put in place have allowed us to offset negative environmental factors and maintain our full-year adjusted earnings outlook."