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Whirlpool Slips After Earnings Miss, Outlook Cut

Published 10/21/2022, 07:35 AM
Updated 10/21/2022, 07:43 AM
© Reuters.  Whirlpool (WHR) Slips After Earnings Miss, Outlook Cut

By Senad Karaahmetovic

Whirlpool (NYSE:WHR) reported weaker-than-expected Q3 results to send its shares about 4% lower in pre-open Friday.

The company reported an EPS of $4.49 on revenue of $4.78 billion, much lower than the consensus of EPS of $4.78 on $5.2 billion. Sales fell 13% YoY, led by a major deceleration (-28%) in the EMEA region.

“While our Q3 results were impacted by ongoing macroeconomic headwinds and continued elevated levels of inflation that resulted in slowing demand, we remain on track to deliver the second-best year in our 111-year history in 2022,” said CEO Marc Bitzer.

“Looking ahead, we see these challenges persisting into the first half of 2023, however, we believe we have the right actions in place that will allow us to navigate through the current environment while advancing our portfolio transformation and delivering strong shareholder returns.”

As a result, Whirlpool cut its full-year EPS guidance to $19.00, down from the prior range of $22-24 and lower than the Bloomberg consensus of $21.76. Revenue is seen at $20.1 billion, again lower than the $20.59 billion consensus. Full-year free cash flow forecast is cut to $950 million from $1.25 billion.

The company also said that its strategic review of EMEA identified two potential strategic investors. The process is in the final evaluation stage.

Goldman Sachs analysts said Whirlpool’s Q3 results and guidance cut are the results of slowing global demand.

“Overall, results reflect industry declines ranging from 10% in the US to 25% in Mexico along with elevated input costs. In turn, global production was reduced 35% in 3Q and inventory units decreased 10% YOY.”

Credit Suisse analysts added:

“The company acknowledged that there will likely be demand challenges in demand through 1H23, but understandably presented a positive view beyond that based on an expectation of a rebound in existing home sales (a key driver of demand for its appliances). We’re more cautious on the outlook for existing home sales.”

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