Whirlpool Corporation announced third-quarter 2005 net earnings of U.S. $114 million, or $1.66 per diluted share, compared to $101 million, or $1.50 per diluted share, in the same period last year. Net sales of $3.6 billion increased 9 percent from last year and represented a third-quarter record. Excluding currency translations, net sales increased by approximately 6 percent.
"Our third-quarter operating profit, which included approximately $110 million of higher material and oil-related costs, improved versus last year. The combination of actions we began implementing last year to address the significantly higher material and oil-related cost environment have proven to be effective," said Jeff M. Fettig, Whirlpool's chairman, president and CEO. "These actions included driving higher levels of controllable productivity, leveraging our global operating platform, reducing non-product related spending, accelerating the rate of innovation to the market, and implementing cost-based price adjustments."
Results for the company's third quarter in comparison to last year were negatively impacted by higher material and oil-related costs, incentive compensation expense, unfavorable currency, and increased restructuring costs. The impact from global cost-based price adjustments, productivity improvements and cost-control initiatives all helped offset these higher costs.
The company's results included two non-recurring items. Interest and sundry income included a $9 million gain from the sale of a business, and operating income was reduced by approximately $6 million from a fire at a major distribution center in the United Kingdom.
"We entered this year faced with a continuation of the significant material and oil-related cost increases that began during 2004. Actions we began implementing during the second half of last year were expected to return our operations to delivering year-over-year earnings improvement during the third quarter of this year, and we are on track with these plans," added Fettig. "We are pleased with the strategic and operational progress our company has made during this period of unprecedented cost increases."
Cash provided by operating activities for the first nine months of 2005 was $269 million compared to $305 million last year. The level of working capital increased versus last year as planned, but declined as a percentage of sales due to strong inventory and accounts receivable management.
On a year-to-date basis, sales increased to a record $10.4 billion, up 8 percent from the prior-year period. Excluding currency translations, sales increased approximately 5 percent. Net earnings of $296 million declined 4 percent, primarily attributable to higher material and oil-related costs of approximately $480 million.
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