Unpicking the truth from the convenient truths here could be a problem as Whirlpool have issued a press release as its shares have slid 13% since the Brexit vote took place last Thursday.
Whether this slide is a direct result of the Brexit vote or not is unclear presently however it is quite concerning to investors that, in effect, Whirlpool has had $1.85 Billion wiped out in only a few days. Normally we’d give you what that was in UK Pounds as well but with the value of the Pound we won’t bother this time round as, a/ it’s embarrassing and b/ it’s a moving target!
Of course Whirlpool wasn’t the only company that’s tanked (at least a bit) since the recent Brexit vote but, it’s the one of the only ones we watch closely.
Now however Whirlpool appears to have been forced to try to calm and reassure investors that everything is okay and, everything will be okay.
In the fast moving landscape we’re in just now, good luck with that.
But in the aftermath of Brexit is this really a direct result of the historic vote or, simply convenient to blame that as a cause? We think there may well be a direct connection with Brexit but it may well be that the European outlook isn’t so rosy after recent events and not just a UK-centric thing going on.
The full press release follows:
On June 23, 2016, voters in the United Kingdom made the decision to leave the European Union. Whirlpool Corporation’s business in the United Kingdom represented approximately 5% of the Company’s global revenues in the 2015 fiscal year. Most of the Company’s products sold in the U.K. were produced in other European countries.
“Clearly the “Brexit” vote has created a number of uncertainties, many that will take some time to play out,” said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. “The U.K. is an important country for us and we plan to continue delivering innovative new products in the U.K. and Europe.”
The Company regularly performs risk assessments as part of the operational planning cycle and has prepared for either outcome of the vote. In the past, the Company has utilized a variety of approaches to manage volatility, including financial hedging. The Company plans to execute a previously-announced cost based price increase in the third quarter and expects to continue with strong ongoing cost productivity programs to lower overall costs in the EMEA region.
“As we have done in the past in all markets, we are prepared to take swift actions to offset the negative impact to our EMEA operations,” Fettig added. “We will continue to monitor the situation closely to determine if additional actions may be required.”
Whirlpool Corporation plans to announce its second-quarter earnings during the week of July 18. Based on today’s environment and strength of other parts of its global operations, the Company is reaffirming its full-year guidance of GAAP earnings per diluted share of $11.25 to $12.00 and ongoing earnings per share of $14.00 to $14.75. The Company also expects to generate cash provided by operating activities of $1,400 to $1,550 million and free cash flow of $700 to $800 million.
