Whirlpool 4Q profit more than doubles; sales rise, helped by big gains in Latin America, Asia

Whirlpool 4th-quarter profit more than doubles

NEW YORK — After more than a year of waning sales, customers are starting to make big-ticket appliance purchases again, helping Whirlpool Corp.’s fourth-quarter profit more than double and leading it to issue a strong 2010 outlook.

Cost-cutting and big sales gains in Asia and Latin America were big contributors to the world’s largest appliance maker’s quarterly performance.

Whirlpool shares jumped $6.17, or 8.1 percent, to close at $82.23.

Improvements in North America, though smaller than those in emerging markets, may mean consumers are becoming more confident in the economy’s recovery and their ability to make larger purchases. The recession, coupled with the brutal impact of the soft housing market and tight credit, caused many shoppers to put off appliance purchases and focus on more basic items.

For 2010, the Benton Harbor, Mich., company anticipates earnings of $6.50 to $7 per share, above estimates of $6.45 per share. Its U.S. sales could get a boost from a federal tax-rebate program for purchases of energy-efficient appliance, which has yet to begin in most states.

Looking farther ahead, Chairman and CEO Jeff Fettig said during a conference call that Whirlpool’s long-term goal is for 10 percent to 15 percent growth in annual earnings per share on sales growth of 5 percent to 7 percent annually.

In the fourth quarter, Whirlpool, whose other brands include Maytag and Kitchenaid, posted net income of $95 million, or $1.24 per share. Excluding a legal expense of 40 cents per share, profit was $1.64 per share, which beat the $1.32 per-share forecast of analysts surveyed by Thomson Reuters. These estimates usually exclude one-time items.

Revenue for the period ended Dec. 31 rose 12.7 percent to $4.86 billion, topping Wall Street’s $4.44 billion. Removing foreign currency fluctuations, sales grew about 5 percent for the quarter.

In North America, sales climbed 4 percent to $2.6 billion — the first quarter of sales growth since 2007’s first quarter. It was also much better than the previous quarter, when revenue was down 9 percent. U.S. industry unit shipments rose 6 percent, providing hope that customers are starting to make more purchases.

Whirlpool predicts 2010 U.S. industry unit shipments will climb 2 percent to 4 percent.

Latin America revenue surged 52 percent to $1.2 billion, while Asian sales increased 34 percent to $188 million.

Executives touted new products that were rolled out during the quarter — including its Apollo washing machine in Asia and the Affresh dishwasher and garbage disposal cleaner in North America — anticipating shoppers will respond well to the launches.

“We expect our new products to build on our branded position during the year,” Fettig said.

Full-year earnings slipped 22 percent to $328 million, or $4.34 per share, compared with $418 million, or $5.50 per share, in the previous year. While the performance was lower than the prior year, it was still above Whirlpool’s guidance for a profit of about $4.25 per share.

Annual sales dropped 10 percent to $17.1 billion from $18.91 billion. Taking out foreign currency fluctuations, revenue fell about 6 percent.

Whirlpool managed to reduce its net debt to about $1.5 billion in 2009 from nearly $2.5 billion in the previous year — the lowest in four years, Chief Financial Officer Roy Templin said.