Whirlpool Corporation Reports 2003 Second-Quarter Results
Jul 24, 2003
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Whirlpool Corporation announced second-quarter 2003 net earnings of U.S. $94 million, or $1.35 per diluted share, compared to $63 million, or $0.91 per diluted share, in the same period last year. Second-quarter net sales of $2.99 billion increased 9 percent from last year. Excluding consolidated sales from the company's 2002
acquisitions -- Polar S.A. of Poland and Vitromatic S.A. de C.V. of Mexico -- and currency translations, net sales increased 2 percent.
"This performance reflects the solid contributions from our global businesses and brands, including the introductions of innovative new products worldwide," said David R. Whitwam, president and CEO. "The results also demonstrate the positive impact from continuous improvements in productivity, and from actions we are taking to align the company's cost structure with current economic and industry conditions."
Second quarter highlights include:
*$2.99 billion in net sales was a record for the company.
*Operating profit was $195 million. Net earnings were $94 million, or $1.35 per diluted share.
*Whirlpool Corporation received awards for home appliance design innovation in the 2003 Industrial Design Excellence Awards (IDEA) competition. The company received a gold award for the Whirlpool(R) Duet(R) fabric care system and its European counterpart, Whirlpool(R) Dreamspace(TM). The company also received bronze awards for the KitchenAid(R) briva in-sink dishwasher and the Supermatic(R) Tapa Lava-Lava(TM) clothes washing innovation designed for consumers in Mexico.
*Whirlpool Europe was recognized as the Euronics major appliance Supplier of the Year for 2003. Euronics represents Europe's largest group of major appliance retailers with 6,500 stores in 21 countries. The award is based on quality of products and services, growth of euro sales, and the ability to serve Euronics in expanding markets.
*Whirlpool Europe was selected by the Swedish-based IKEA group to be the retailer's exclusive global supplier of major appliances. IKEA is a global home furnishing retailer with 146 stores in 22 countries.
Whirlpool North America's sales of $1.96 billion increased 6.7 percent from the prior year period. Excluding Whirlpool Mexico, sales were up 1.7 percent. Operating profit declined 5 percent, due
primarily to the recall charges and year-over-year increases in pension and employee-related healthcare costs. The decline was partially offset by the curtailment gain, lower compensation expense, spending controls and savings from productivity improvements. Record shipments reflected continuing strong consumer demand for Whirlpool(R) and KitchenAid(R) branded products, including the Whirlpool(R) Duet(TM) clothes washer and dryer pair, the Whirlpool(R)
Conquest(TM) side-by-side refrigerator and the KitchenAid(R)Architect(R) series of stainless-steel kitchen appliances.
U.S. industry unit shipments of major appliances (T7(a)) increased 0.8 percent from the prior year period, and are expected to grow moderately in the second half of the year. Full-year shipments are expected to increase by approximately 1-to-2 percent. During the quarter, the company introduced the KitchenAid(R) Pro Line(TM) series at the 2003 Kitchen/Bath Industry Show in Atlanta. The KitchenAid(R) Pro Line(TM) series is a collection of major and countertop appliances featuring design and professional-level performance.
Whirlpool Europe's sales of $628 million increased 23.7 percent from the prior year period. (Excluding currency translations, sales
increased approximately 2 percent.) Strong consumer demand for new innovative products, including the Whirlpool(R) Dreamspace(TM) clothes
washer, the Whirlpool(R) Conquest(TM) side-by-side refrigerator, and the Whirlpool(R) Mini-BI microwave oven, were reflected in the
increase. Operating profit, which was affected by market price declines, increased due to significant improvement in productivity and
volume growth. During the quarter, appliance industry unit shipments increased by
2-to-3 percent from the prior year period, and are expected to be moderately higher in the second half of 2003. Based on current
economic conditions, the company expects full-year industry shipments to grow by 1-to-2 percent from last year's level.
Whirlpool Latin America's sales of $318 million were flat compared with the prior year period. (Excluding currency translations, sales
increased approximately 10 percent.) Industry shipments in Brazil declined 22 percent. Despite a challenging economic and industry environment, as well as the expected elimination of tax credits during the quarter and higher material costs, operating profit increased by
8.2 percent and operating margin improved from the prior year period. The results reflect improved product pricing, growth of appliance
exports and cost savings from productivity initiatives. Based on current economic conditions, the company expects full-year industry unit shipments to decline 12-to-15 percent from last year's level. During the quarter, Brastemp brand introduced Luminata(TM), a
complete line of premium kitchen appliances for Brazilian consumers. Also, the Consul brand was named a top-ten Superbrand in Brazil by the
magazine Revista Expressao. The brand was honored for its refrigeration and air-conditioning product lines.
Whirlpool Asia's sales of $118 million increased 7.4 percent from the prior year period. (Excluding currency translations, sales
increased approximately 3 percent.) The success of new product introductions and expanded distribution helped drive the sales
improvement throughout the region. Operating profit was affected by market price declines, increased provisions for operating reserves and
the impact from SARS, which drove a 15-to-20 percent retail sales decline in the Hong Kong region. Based on current economic conditions, the company expects full-year appliance industry shipments in the region to increase 3
percent from last year's level.
During the quarter, Whirlpool India introduced the Direct Cool(TM) refrigerator with the fast forward ice(TM) option that gives Indian
homemakers in hot climates the ability to rapidly make ice. In China, the company introduced the Whirlpool(R) Jupiter(TM) clothes washer
with Season Sensor(TM), a technology that automatically adjusts the wash cycle for seasonal changes in water temperature.
"Based on our current view of second-half economic improvement and industry demand in key markets, as well as the anticipated benefits
from new product introductions, benefits from acquisitions, and ongoing improvements in cost productivity, we continue to expect
full-year earnings-per-share of $5.90-$6.10," said Mr. Whitwam.
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