Breaking News
0

Whirlpool's (WHR) Q4 Earnings Surpass Estimates, Sales Miss

By Zacks Investment ResearchStock MarketsJan 29, 2019 01:37AM ET
www.investing.com/analysis/whirlpools-whr-q4-earnings-surpass-estimates-sales-miss-200380794
Whirlpool's (WHR) Q4 Earnings Surpass Estimates, Sales Miss
By Zacks Investment Research   |  Jan 29, 2019 01:37AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Whirlpool Corporation (NYSE:WHR) reported mixed fourth-quarter 2018 results, wherein earnings outpaced estimates while sales missed. This marked the company’s second consecutive quarter of positive earnings surprise, with seventh straight sales miss. Further, management issued forecasts for 2019.

A glimpse of the company’s price trend shows that the stock has underperformed the industry in the past three months. This Zacks Rank #3 (Hold) stock has gained 4.2% compared with the industry’s 13.4% rally.



Q4 Highlights

Whirlpool delivered adjusted earnings of $4.75 per share, surpassing the Zacks Consensus Estimate of $4.30. The bottom line also increased 15.9% from $4.10 per share earned in the year-ago quarter. On a GAAP basis, the company reported earnings per share of $2.64 compared to a loss of $3.74 incurred in the prior-year quarter.

Notably, the bottom line benefited from solid execution of higher prices, strict working capital reduction and a lower tax rate. Also, robust growth at the company’s North America segment despite sluggish industry demand and higher raw material costs aided its quarterly performance.

Whirlpool Corporation Price, Consensus and EPS Surprise

Whirlpool Corporation Price, Consensus and EPS Surprise | Whirlpool Corporation Quote

Net sales came in at $5,660 million, almost flat with the year-ago period number. However, the top line fell short of the Zacks Consensus Estimate of $5,745 million. The underperformance can be attributed to sales decline at the company’s Latin America and EMEA segments, partly offset by sales growth at the North America and Asia divisions. On a currency-neutral basis, the metric grew 2.5%.

Adjusted operating profit (EBIT) declined nearly 7% to $348 million from $374 million in the year-ago quarter. Also, operating margin contracted 40 basis points (bps) to 6.2% on elevated expenses, decline in unit volumes and adverse currency. These were somewhat compensated with favorable product price/mix and restructuring benefits.

Regional Performance

Sales from North America rose 6.9% to $3.1 billion, while the same grew 5.4% on a currency-neutral basis. Adjusted operating profit margin expanded 40 bps to 11.8% as lower fixed expenses and favorable product price/mix were partly negated by raw material inflation, tariffs and increased freight costs. In dollar terms, operating profit increased 7.1% to $362 million.

Sales from Latin America declined 10% year over year to $990 million. However, excluding currency translations, the metric edged up 1.1%. Adjusted operating margin of 5.9% fell 60 bps, mainly due to higher raw material expenses and adverse currency, which were offset by improved productivity and favorable product price/mix. In dollar terms, operating income also decreased 15.7% to $59 million.

Sales from EMEA declined 14.3% to $1.2 billion. On a currency-neutral basis, the metric dropped 6.3%. Whirlpool incurred operating loss of $15 million in the fourth quarter against the operating income of $8 million registered in the year-ago quarter. This downside can be attributed to raw material inflation, lower productivity on account of fall in unit volumes and adverse currency.

Sales from Asia grew 3.9% to $372 million from the prior-year quarter figure. Excluding currency effects, the metric also rose 11.2%. However, the segment reported operating profit of $8 million that plunged 20% from the year-ago period. Also, operating margin contracted 80 bps to 1.9% as gains from restructuring and favourable product price/mix were more than offset by higher raw material costs and elevated bad debt provision.

Financial Position

Whirlpool had cash and cash equivalents of $1,498 million as of Dec 31, 2018, and long-term debt of $4,046 million.

In 2018, the company generated $1,229 million cash in operating activities and reported free cash flow of $853 million. Meanwhile, capital expenditures amounted to $376 million for the year. Furthermore, Whirlpool bought back shares worth $1,153 million and paid dividends of $306 million in the same time frame.

2019 Guidance

Following the mixed quarterly performance, management issued guidance for 2019. Whirlpool envisions adjusted earnings per share in the range of $14-$15 compared with $15.16 earned in 2018. On a GAAP basis, it now anticipates earnings per share of $12.75-$13.75.

Markedly, this guidance includes gains from restructuring, positive product price/mix, and reduced share count, which will be compensated with higher tax rate as well as increased costs and currency. The Zacks Consensus Estimate for 2019 is pegged at $16.18, which is likely to witness downward revisions in the coming days.

While operating cash flow is expected in the $1.4-$1.5 billion range, free cash flow is projected to come in at $800-$900 million for the year. This guidance includes restructuring cash outlays of roughly $100 million and capital expenditures of $625 million related to free cash flows.

Count on These Better-Ranked Consumer Discretionary Stocks

Crocs, Inc. (NASDAQ:CROX) has an impressive long-term expected earnings growth rate of 15% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cherokee Inc. (NASDAQ:CHKE) , a Zacks Rank #1 stock, delivered a positive earnings surprise of 100% in the last reported quarter.

lululemon athletica inc. (NASDAQ:LULU) delivered a positive earnings surprise in each of the trailing four quarters, the average being 19.5%. The company has a Zacks Rank #2 (Buy).

Wall Street’s Next Amazon (NASDAQ:AMZN)

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>



Whirlpool Corporation (WHR): Get Free Report

lululemon athletica inc. (LULU): Free Stock Analysis Report

Cherokee Inc. (CHKE): Free Stock Analysis Report

Crocs, Inc. (CROX): Free Stock Analysis Report

Original post

Zacks Investment Research
Whirlpool's (WHR) Q4 Earnings Surpass Estimates, Sales Miss
 
Whirlpool's (WHR) Q4 Earnings Surpass Estimates, Sales Miss

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email