WASHINGTON (dpa-AFX) - Home appliances maker Whirlpool Corp. (WHR) reported Wednesday a decline in second-quarter profit on higher one-time items and lower net sales. Operating earnings per share, increased from last year, but missed analysts' estimates, with net sales also below view. Further, the company trimmed its earnings forecast for fiscal 2014, below analysts' view.
In pre-market activity, Whirlpool shares were losing $7.95 or 5.55 percent, and trading at $135.25.
For the second quarter, net earnings available to the company was $179 million or $2.25 per share, down from $198 million or $2.44 per share a year ago. The latest results included restructuring expense of $0.33 per share, investment expense of $0.12 per share and antitrust resolutions of $0.01 per share.
The prior year results included restructuring expense of $0.29 per share and investment expenses of $0.10 per share, more than offset by Brazilian (BEFIEX) tax credits and U.S. Energy tax credits.
Ongoing business earnings, which excluded items, were $2.62 per share, compared to $2.37 per share last year. The improvement was mainly driven by improved product price and mix, ongoing cost productivity and the benefit of cost and capacity-reduction initiatives, the company said.
On average, eight analysts polled by Thomson Reuters expected earnings of $2.91 per share for the quarter. Analysts' estimates typically exclude special items.
Meanwhile, ongoing business operating profit dropped to $330 million from $335 million last year, and margin was maintained at 7.1 percent as the benefits of product price, ongoing cost productivity and cost and capacity-reduction initiatives were more than offset by lower unit volumes, and higher material costs.
Net sales in the quarter declined to $4.68 billion from $4.75 billion last year. Excluding the impact of both foreign currency and Brazilian or BEFIEX tax credits, sales increased approximately 1 percent. Wall Street expected revenues of $4.84 billion.
On a geographical basis, North American sales increased over 3 percent year-over-year to $2.7 billion.
Asia's performance was hurt mainly by lower unit volumes and margins due to trade inventory transitions in China related to the pending acquisition of a majority stake in Hefei Rongshida Sanyo Electric Co., Ltd.
Looking ahead for fiscal 2014, the company now expects net earnings per share on a reported basis to be in the range of $10.30 to $10.80 and ongoing business earnings per share of $11.50 to $12.00. Analysts project annual earnings per share of $12.16.
Previously, the company expected annual net earnings per share to be in the range of $11.05 to $11.55 and ongoing business earnings per share of $12.00 to $12.50.
The company said the downward revision reflects the trade customer inventory transitions in China related to the pending acquisition, and investment expenses related to the pending acquisition of a majority stake in Indesit Company S.p.A.
Chairman and Chief Executive Officer Jeff Fettig said, 'For the balance of the year, we will benefit from increasing global demand, new product introductions, previously announced price increases and strong productivity. We expect to acquire majority interests in Hefei Sanyo and Indesit by the end of this year, all of which provides us with an outstanding platform for growth and value creation in 2015 and beyond.'
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