Whirlpool more than doubles 2Q net income as it cut costs and benefited from federal rebates

Whirlpool 2Q net income more than doubles

CHICAGO — Whirlpool Corp.’s second-quarter net income more than doubled as it cut costs and benefited from shoppers taking advantage of federal rebates to buy appliances. But worries about whether it can keep it up gave investors jitters.

The results topped Wall Street expectations and prompted the world’s largest appliance maker to boost its full-year outlook on Tuesday.

The company cautioned that its momentum will likely slow in the coming months as the benefit from U.S. subsidies erodes. That drove shares down $4.86, or 5.3 percent, to $86.50 in afternoon trading.

“Overall we’re pleased with our performance for the first half of the year,” Chairman and CEO Jeff M. Fettig told investors during a conference call. “For the balance of the year, we expect the global economic environment will remain fragile, although we do expect demand to be positive, albeit at a slower rate than the first half of the year.”

Whirlpool boosted its forecast for the number of washing machines, dishwashers and other products it will ship in the U.S., saying the figure would likely climb 5 percent. But it maintained its forecasts for other regions of the globe — worrying investors.

In a research note to investors, Wall Street Strategies analyst Brian Sozzi said the company’s results were “mixed,” even though the results were far better than expected.

“Our inclination is to appreciate the strong quarter from Whirlpool, especially in light of a string of softer-than-expected economic data on a global scale,” he wrote. “That said, we are becoming mindful of the company’s tougher profit growth comparisons in (the second half of the year) and a demand picture in Europe that may weaken further.”

Whirlpool, which makes its namesake brand along with Maytag, KitchenAid and Jenn-Air products, earned $205 million, or $2.64 per share, during the three months that ended on June 30. Excluding certain one-time items, that figure is $2.82.

In the same period last year the company earned $78 million, or $1.04 per share.

Revenue rose 9 percent to $4.53 billion, up from $4.17 billion.

Analysts surveyed by Thomson Reuters expected the company to earn $2.17 per share on revenue of $4.50 billion.

In the U.S., sales rose 6 percent while shipments climbed 7 percent. That helped the region’s operating profit to climb to $200 million, up from 120 million last year.

But in Europe — where consumers were reeling from grim economic news — results were less rosy.

There, sales fell 6 percent, but cost cuts helped the region post a $20 million operating profit. Shipments are expected to be flat for the year.

Demand for Whirlpool’s washers, dryers and other appliances was hurt by the recession. But in the U.S., sales have picked up because of federal rebates for energy-efficient appliances. The federal home buyer tax credit of up to $8,000 that helped spur home sales in the first half of the year also may have helped appliance makers, because people are more likely to buy appliances when they move into a new house.

Those benefits are certain to wane in the coming quarters. The home buyer tax credit expired April 30, although buyers who signed contracts by then have until Sept. 30 to complete purchases. Many of the state-run programs offering appliance rebates have already ended.

Whirlpool, based in Benton Harbor, Mich., said it now expects to earn between $9 and $9.50 per share for the full year. That’s up from its previous forecast of net income between $8 and $8.50 per share, and above Wall Street’s expectation of $8.67 per share.

Shares fell $5.02, or 5.5 percent, to $86.34 in midday trading Tuesday.