Whirlpool Profits Up; Sees Good Year Ahead - Today's News Updates

Whirlpool Corp., Benton Harbor, Mich., announced that fourth-quarter net earnings rose 111 percent to $95 million, or $1.24 per diluted share, compared to $44 million, or $0.60 per diluted share reported during the same period last year. Fourth-quarter results included an expense of $46 million, or $0.40 per share after tax, due to an accrual related to a previously disclosed legal action pertaining to a collection dispute. Sales of $4.9 billion increased 13 percent from the $4.3 billion reported in the fourth quarter of 2008. Excluding the impact of foreign exchange translation, the company's fourth-quarter sales increased approximately 5 percent.

Fourth-quarter operating profit totaled $199 million compared with $10 million in the prior year. Results were favorably impacted by cost reduction and productivity initiatives and increased sales volume. These favorable factors were partially offset by lower price/mix.

Full-year 2009 net earnings were $4.34 per diluted share compared to $5.50 per diluted share reported for 2008. The company reported annual net sales of $17.1 billion, a decrease of 10 percent from the prior year. Excluding the impact of foreign currency translation, sales declined approximately 6 percent from the prior year.

“In 2009, we significantly improved our global cost structure and operating performance despite a substantial decline in global demand levels,” said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. “In addition, we generated record free cash flow and strengthened our financial position. I am pleased with our execution in this challenging environment, and we look to build upon our progress in 2010.”

Whirlpool generated free cash flow** of $1.1 billion during 2009 compared with $(0.1) billion during 2008. For the full-year 2009, the company reported cash flow from operations of more than $1.5 billion. Working capital, particularly due to reduced inventory balances, was a significant source of cash flow during the year.

FOURTH QUARTER REVIEW

Whirlpool North America
Fourth-quarter sales of $2.6 billion increased 4 percent from the prior year, while North American unit shipments increased 8 percent. U.S. industry unit shipments of major appliances (T7*) increased 6 percent during the fourth quarter.

The North America region reported operating profit of $136 million compared to a loss of $(20) million in the previous year. The improvement was primarily the result of cost reduction, productivity initiatives and increased sales volume. These factors were partially offset by lower product price/mix.

Based on the current economic outlook, the company expects full-year 2010 U.S. industry unit shipments to increase between 2 percent and 4 percent.

Whirlpool Europe
Whirlpool Europe reported fourth-quarter sales of $956 million, a 2 percent increase from the prior year. Excluding the effects of currency, sales declined approximately 9 percent. Overall industry unit demand during the quarter declined approximately 8 percent from the prior year.

The region reported an operating profit of $19 million during the fourth quarter compared with $2 million reported in the previous-year period. Results were favorably impacted by lower costs and higher price/mix. These factors were partially offset by lower volume.

The company expects full-year 2010 industry unit shipments to be approximately equal to 2009 levels.

Whirlpool Latin America
Fourth-quarter net sales totaled $1.2 billion, an increase of 52 percent from the prior year. Excluding currency translation, sales increased approximately 28 percent.

Operating profit totaled $138 million in the fourth quarter compared with $110 million in the prior year. The improvement in profitability is primarily related to higher sales volumes, higher productivity and favorable foreign currency fluctuations. These items were partially offset by lower monetization levels of certain tax credits and lower price/mix.

The company currently anticipates full-year 2010 Brazilian appliance shipments will increase 5 percent to 10 percent compared to the previous year.

Whirlpool Asia
Whirlpool Asia reported fourth-quarter sales of $188 million, increasing 34 percent from the prior year. Excluding the impact of currency, sales increased 27 percent. Operating profit during the quarter totaled $6 million, an increase of $3 million from the prior year. The year-over-year increase in operating profit was mainly attributable to higher unit volume and was partially offset by lower price/mix.

The company anticipates full-year 2010 industry unit shipments in Asia to be up 3 percent to 5 percent compared to 2009 levels.

Outlook
For the full-year 2010, Whirlpool Corporation expects earnings per diluted share between $6.50 and $7.00. For the full year, the company expects to generate free cash flow of approximately $400 to $500 million. The company’s earnings and free cash flow projections are based upon current economic forecasts and business plans.

“We have positioned the company to deliver strong earnings growth despite a continued challenging economic backdrop in the developed economies,” said Fettig. “Cost reduction, cash flow generation and balanced market execution remain key operating priorities. These efforts combined with our global brand portfolio, innovative product offerings and the value of innovation we bring to consumers will provide us with growth opportunities throughout the year.”

* T7 refers to the following household appliance categories: washers, dryers, refrigerators, freezers, dishwashers, ranges and compactors.

** A reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by operations appears below under the heading Cash Flow Reconciliation.