Whirlpool Corporation (Benton Harbor, Michigan, U.S.) said today that second quarter net sales rose 33 percent to a record U.S. $4.7 billion, reflecting the acquisition of Maytag Corporation and strong global demand for Whirlpool products. Excluding the recent acquisition, net sales increased approximately 5 percent.
Net earnings from continuing operations for the second quarter of 2006 were $100 million, or $1.26 per diluted share, compared to $96 million, or $1.42 per diluted share in the same period last year. Second quarter net earnings include the results and integration costs of the Maytag acquisition.
During the second quarter Whirlpool said it intends to sell off the Hoover floor care, Dixie-Narco vending, Amana commercial microwave, and Jade commercial products appliance businesses. Financial results from these businesses are included in discontinued operations. Total net earnings for the second quarter, including discontinued operations, were $91 million or $1.14 per diluted share.
“All of our regional businesses delivered higher unit volume, sales and operating profit performance during the quarter,” said Jeff M. Fettig, Whirlpool’s chairman and chief executive officer. “I am particularly pleased with the trade and consumer response to our new product innovations, which have been exceptional. We expect material and oil-related cost increases to continue to accelerate during the second-half of 2006. Accordingly, the company is implementing cost-based price adjustments, productivity initiatives and cost controls to offset the heightened cost environment. Our Maytag integration activities are progressing at an efficient and disciplined pace and remain on-track with previous expectations.”
Operating profit results, which reflect strong sales growth and productivity improvements, offset purchase accounting charges, acquisition integration related expenses, higher commodity prices, new product introduction costs, and increased restructuring costs.
“Global industry growth for the second quarter was in-line with our expectations and consistent with our prior guidance," Fettig said. "As previously communicated, we expect flat-to-moderate industry unit shipment growth during the second half of the year and anticipate global industry growth of 1-to-2 percent in 2007. Despite somewhat softer near-term demand, the underlying industry fundamentals remain positive.”
Whirlpool Europe reported record revenue and operating profit during the second quarter. Revenue increased approximately 5 percent from last year’s levels to a record $806 million, driven by strong Whirlpool brand performance. Currency translations did not have a material impact on sales. Company unit shipments, reflecting continued strong demand for the region’s innovative product line, continued their positive trend during the quarter and exceeded estimated industry demand of 1 percent to 2 percent. Based on current economic conditions, the company continues to expect full-year industry unit shipments in 2006 to increase approximately 1 percent to 2 percent.
Whirlpool Latin America sales increased 17 percent from the prior-year period to $580 million, driven by strong appliance unit volume. Excluding currency translations, sales increased approximately 13 percent. Industry unit shipments of appliances are estimated to have increased approximately 11 percent during the quarter. Record operating profit of $55 million, which included the impact of currency, improved 76 percent during the quarter and operating profit margins expanded to 9.4 percent. Productivity improvements and regional incentives more than offset higher material prices and increased brand investment. Based on the current economic environment in Brazil, the company continues to expect industry shipments in 2006 to increase 8 percent to 10 percent.
Whirlpool Asia delivered operating profit of $1 million for the second quarter compared to a $4 million loss in the prior year. Sales of $133 million were up 8 percent from last year. Excluding currency translations, sales increased approximately 11 percent. The operating profit improvement reflects improved performance in India, the regions largest market, and reflects the success of new product launches, productivity improvements and a favorable product mix. Based on current economic conditions, the company continues to expect full-year industry unit shipments to increase 5-to-7 percent.
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