Whirlpool Corp., the world's biggest producer of appliances, had second-quarter net earnings of $113 million, compared to a net loss of $161 million in the second quarter of 2011. Sales in constant currencies were up approximately 2%. The corporation reported sales for the quarter of $4.5 billion, down from $4.7 billion in 2Q 2011.
"Our North America and Latin America businesses continue to perform extremely well and we are pleased with our financial performance through the first half of the year," said Jeff M. Fettig, chairman and CEO of Whirlpool Corp. "Our ongoing business operating performance is well ahead of last year offsetting lower industry demand, volatile foreign currency and material inflation. We remain positive regarding our underlying business performance and are optimistic on recent U.S. housing trends exiting the second quarter."
Second-quarter GAAP operating profit was $195 million, down from $223 million in 2Q 2011, with the gains from a positive product price/mix more than offset by reduced Brazilian (BEFIEX) tax credits, higher restructuring expense, unfavorable currency, lower industry demand, and higher material costs.
On an adjusted basis, second-quarter operating profit was $223 million, or about 5% of sales, and was up from the $158 million, or about 3% of sales, in 2Q 2011.
Whirlpool said strong profitability improvement in the North America and Latin America regions was partially offset by weak economic conditions in Europe.
During the six months ended June 30, 2012, the company reported cash flow used in operating activities of -$355 million compared to -$234 in the first half of 2011.
Whirlpool continues to expect to generate free cash flow between $100 million and $150 million. Included in its guidance is the $275 million final installment to settle a Brazilian collection dispute, $110 million for antitrust payments, pension contributions of up to $250 million, and restructuring outlays of up to $280 million.
"Strong cash generation from our business is expected to more than offset these legacy liabilities, fund our cost and capacity-reduction initiatives and fuel new product innovation," said Fettig. "Our expanding operating margins and the conclusion of payments for legacy liabilities position us well for generating strong cash flow in the second half of the year and into 2013."
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