Whirlpool 1Q profit more than doubles, sales rise

Updated 4/26/2010 7:14 AM

NEW YORK -- Whirlpool Corp. said Monday that its first-quarter profit more than doubled as sales of its appliances improved both domestically and overseas.

Shares soared as the company also boosted its guidance. The strong quarter offers a strong indication that consumers are feeling comfortable enough economically to buy more big-ticket items.

The world's largest appliance maker lifted its 2010 earnings forecast above Wall Street's expectations on its quarterly performance.

Its stock gained $7.89, or 7.7 percent, to $110.11 in premarket trading. The shares have traded between $37.24 and $102.42 over the last year.

Whirlpool, which sells Maytag, KitchenAid, Jenn-Air and its namesake brand, did not say whether a federal rebate program to boost sales of energy efficient products helped sales but analysts largely expect it did.

Last year's stimulus bill funded a $300 million program that will offer rebates of varying amounts -- possibly up to $200 or more -- to buyers of energy-efficient appliances and other products that carry the "Energy Star" label.

In the depths of the recession, shoppers pulled back sharply on purchases of big-ticket items such as washers and dryers, which hurt Whirlpool's profit. But that spending has been increasing as economic conditions improve and shoppers flock to the rebates, which are being doled out by states.

People have been hungry for them, often using up allotted amounts in just days. Massachusetts decided to offer a second round of appliance rebates this summer after program hopefuls used up allotted funding in just hours. Texas' funding was used up within a day.

In the first three months of the year, Whirlpool earned $164 million, or $2.13 per share, well above the $68 million, or 91 cents per share, the company earned a year ago.

The results were significantly higher than the $1.33 per share that analysts surveyed by Thomson Reuters expected. Those estimates normally remove one-time items.

The company, based in Benton Harbor, Mich., said revenue rose 20 percent to $4.27 billion from $3.57 billion, topping estimates of $3.79 billion.

In North America, revenue grew 7 percent to $2.3 billion as U.S. unit shipments of major appliances climbed 6 percent. Whirlpool predicts its full-year U.S. unit shipments will rise 3 percent to 5 percent, up from a previous forecast for a 2 percent to 4 percent increase.

European revenue increased 6 percent to $739 million, with unit demand essentially flat.

Latin American revenue jumped 65 percent to $1.1 billion, mostly on higher sales volumes, increased productivity and the effect of a weaker dollar. The appliance maker anticipates appliance shipments to Brazil will grow about 10 percent in 2010, compared with a prior outlook for a 5 percent to 10 percent rise.

In Asia, revenue surged 60 percent to $192 million. Whirlpool also raised its full-year unit shipment forecast for the region. The company now expects a 5 percent to 8 percent increase. Its previous guidance called for 3 percent to 5 percent growth.

Whirlpool now anticipates a 2010 profit between $8 and $8.50 per share. Its prior guidance was for earnings in a range of $6.50 to $7 per share. Analysts expect a profit of $7.08 per share for the year.

"While economic uncertainty remains, Whirlpool Corp. is well positioned to substantially grow earnings from prior-year levels," Fettig said.