Whirlpool has reported a 20 percent drop in first-quarter profit today on declining U.S. sales and rising oil and steel costs, and as a result has cut its full-year earnings outlook.
Whirlpool which also own the Maytag, KitchenAid and Amana brands among others also forecast a steeper drop in industry appliance shipments this year in North America, its biggest market.
Whirlpool and other appliance makers all appear to be struggling with higher material costs and weak demand in the key U.S. market in wake of the housing slump. In Europe there has also been announcements of price hikes on finished appliances.
Whirlpool’s quarterly profit fell to $94 million, or $1.22 a share, from $117 million, or $1.46 a share from the previous year.
Sales did rise 5 percent to $4.6 billion, better than the $4.46 billion analysts expected, on growth in Europe, Latin America and Asia. But North American sales fell 3 percent as U.S. industrywide shipments of appliances declined about 9 percent.
Whirlpool’s United States operating profit plunged to $44 million from $159 million. Besides the lower sales and higher costs of metals and oil, the company pointed toward increased selling and general expenses tied to product launches and advertising as partly to blame.
Whirlpool said it now expected U.S. industry unit shipments to fall a further 5 to 6 percent this year, a much steeper drop than its previous forecast of a 3 percent to 5 percent decline.
Sales however have risen 13 percent in Europe, 24 percent in Latin America and 19 percent in Asia. Whirlpool said it now expected industrywide appliance shipments in Europe to fall 2 percent to 3 percent this year, while it had previously forecast no change.
Whirlpool forecasts a full-year profit of $7 to $7.50 a share from continuing operations, down from its February outlook of $8.50 to $9.