Whirlpool Earnings Flat, ‘Ongoing’ Up

BENTON HARBOR — Whirlpool Corp. (NYSE: WHR) reported fourth quarter net income of $180 million or $2.36 a share, unchanged from $180 million or $2.28 a share a year earlier. (The per-share figures are different because of fewer shares outstanding this year.)

The company also reported “ongoing business earnings” of $4.33 a share, up from $4.10 a share a year earlier. This figure excludes restructuring expenses, acquisition-related costs, legacy product warranty and liability expenses, and the impacts of income tax.

“We delivered our fifth consecutive year of record ongoing earnings per share through the continued execution of our long-term strategic priorities,” said Jeff M. Fettig, Whirlpool chairman and CEO. “We also continued to create value through our capital allocation strategy, funding our innovation programs with strong levels of investment while returning a record $800 million to shareholders through dividends and share repurchases.”

Fourth-quarter revenue was $5.66 billion, up from $5.56 billion in the fourth quarter of 2015. Excluding the impact of currency, sales increased more than 2 percent.

For the full year, revenue was $20.7 billion, down from $20.9 billion in 2015. Excluding the impact of currency, sales rose 2 percent. Net income was $888 million or $11.50 a share, up from $783 million or $9.83 a share a year earlier. “Ongoing business earnings” were $14.06 a share, up from $12.38 a year in 2015.

Whirlpool reported free cash flow of $630 million in 2016, up from $620 million in 2015.

Whirlpool North America reported fourth-quarter net sales of $3.1 billion, up from $2.9 billion the same quarter the prior year. Excluding the impact of currency, sales rose more than 8 percent. The region reported fourth-quarter GAAP operating profit of $348 million, or 11.1 percent of sales, compared to $340 million, or 11.7 percent of sales, in the same prior-year period. Ongoing business segment operating profit totaled $348 million, or 11.1 percent of sales, compared to $361 million, or 12.4 percent of sales, in the same prior-year period. On a GAAP and ongoing basis, unit volume growth and cost productivity were more than offset by unfavorable product price mix and foreign currency; on a GAAP basis, prior-year results were negatively impacted by the recognition of expenses related to a legal settlement. The company expects full-year 2017 industry unit shipments in the U.S. to increase 4 to 6 percent.

Whirlpool Europe, Middle East and Africa reported fourth-quarter net sales of $1.4 billion, compared to $1.5 billion in the same prior-year period. Excluding the impact of currency, sales fell 8 percent. The region reported fourth-quarter GAAP operating profit of $17 million, or 1.3 percent of sales, compared to $88 million, or 5.7 percent of sales, in the same prior-year period. Ongoing business segment operating profit totaled $45 million, or 3.3 percent of sales, compared to $88 million, or 5.7 percent of sales, in the same prior-year period. Margins were negatively impacted by approximately $40 million in the United Kingdom related to currency and demand weakness associated with the Brexit decision and $10 million for a production and inventory reduction. On a GAAP and ongoing basis, acquisition cost synergies were more than offset by unit volume declines, foreign currency and product price-mix; on a GAAP basis, current period results were negatively impacted by acquisition-related integration costs. The Company expects full-year 2017 industry unit shipments to increase 1 to 2 percent.

Whirlpool Latin America reported fourth-quarter net sales of $860 million, compared to $845 million in the same prior-year period. Excluding the impact of currency, sales decreased 7 percent. The region reported fourth-quarter operating profit of $70 million, or 8.1 percent of sales, compared to $58 million, or 6.8 percent of sales, in the same prior-year period, driven by favorable product price-mix and benefits from cost and capacity reduction initiatives partially offset by unit volume declines. The company expects full-year 2017 industry unit shipments in Brazil to be flat.

Whirlpool Asia reported fourth-quarter net sales of $352 million compared to $312 million in the same prior-year period. Excluding the impact of currency, sales increased 18 percent. The region reported fourth-quarter GAAP operating profit of $18 million, or 4.9 percent of sales, compared to $5 million, or 1.8 percent of sales, in the same prior-year period. Ongoing business segment operating profit totaled $19 million, or 5.3 percent of sales, compared to $11 million, or 3.6 percent of sales, in the same prior-year period. On a GAAP and ongoing basis, unit volume growth and cost productivity more than offset product price/mix and increased investments in marketing, technology and products; on a GAAP basis, prior-year results were negatively impacted by acquisition-related integration costs. The company expects full-year 2017 industry unit shipments to be flat to up 2 percent.

For the full-year 2017, Whirlpool expects earnings per share of $13.25 to $14.25 and ongoing business earnings per share of $15.25 to $16.25.

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