Whirlpool Corp. (WHR, Financial) released its second-quarter results Monday after market close. The company’s earnings and revenue topped estimates for the quarter and also increased from the prior-year's second quarter thanks to strong growth in most of its regional segments.
Earnings highlights
The Benton Harbor, Michigan-based company reported earnings of $4.01 per share for the quarter, surpassing Zacks' consensus estimate of $3.80 per share. The reported earnings were also higher than $3.20 reported in the year-ago period. Revenue grew 2% to $4.92 billion, which was $166 million more than analysts forecasted.
Commenting on the quarter’s performance, Whirlpool’s chairman and CEO Marc Bitzer said:
"At our recent Investor Day, we laid out a robust strategy for creating shareholder value and our excellent second-quarter results impressively demonstrate that we are on track ... Our strong momentum allows us to raise our full-year guidance despite continued global macro uncertainties."
At quarter-end, the company had cash and cash equivalents of $1.178 billion and long-term debt of $4.155 billion.
Region details
Revenue for the North America segment rose 3.6% to $2.9 billion and inched up 3% on a currency-neutral basis. Operating profit amounted to $353 million, up 6.6%. Operating profit margin jumped 50 basis points to 12.4% in the reported quarter courtesy of favurable product mix that was only partly offset by mounting costs coupled with a fall in unit volume.
Revenue in the Latin America division climbed 4.2% in the second quarter to $888 million. Sales increased 9.6% barring currency translations. Operating income increased a mammoth 69.7% to $56 million. Operating margin improved 250 basis points to 6.3% in the quarter because of favorable product mix that was offset a bit by adverse currency exchange.
Sales in Europe, the Middle East and Africa dropped a combined 9.1% to $1 billion. The same metric slipped a meager 0.2% on a currency-neutral basis. The appliance maker recorded an adjusted operating loss of $16 million in the second quarter. The company benefited from restructuring activities and volume recovery in major countries, which partially compensated for the operating loss.
At Whirlpool Asia, sales rose 0.5% to $430 million. Barring currency translations, sales inched up 4.7%. Operating profit in the segment amounted to $15 million, down 65.1%. Operating margins declined 650 basis points to 3.6%.
Financial forecast
The company projects 2019 earnings per share will be between $14.75 and $15.50.
Operating cash flows are estimated to be roughly $1.4 billion, with free cash flow of approximately $800 million for the whole year. The guidance includes a restructuring cash expense of $200 million and capital expenditure of nearly $625 million.
Disclosure: I do not hold any position in the stock mentioned.
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