Whirlpool which is now the world’s largest appliance manufacturer, reported higher-than expected fourth-quarter profit on Tuesday as international sales and savings from the Maytag acquisition offset a drop in U.S. demand, and its shares rose as much as 14 percent.
The manufacturer of KitchenAid, Maytag and Amana appliances forecast 2008 earnings in line with analysts’ estimates, saying it expected weak demand in the United States and Europe, and stronger sales in emerging markets such as Latin America, India and China.
Quarterly profit rose 72 percent to $187 million, or $2.38 a share, from $109 million, or $1.37 a share, a year earlier. Analysts were expecting $2.15 a share, according to Reuters.
“Good numbers all around,” said a Morgan Keegan analyst. The unexpectedly strong results in the face of the worst decline in industry demand in two decades showed Whirlpool was gaining market share and benefiting from new products, she added.
Sales rose 7.5 percent to $5.3 billion, above the $5.2 billion analysts expected. Revenue increased 12 percent in Europe, 30 percent in Latin America and 26 percent in Asia. Whirlpool said its branded products, especially Maytag, gained market share in the latest quarter.
In North America, Whirlpool’s biggest and home market, sales declined less than 1% to $3 billion, which is above the industry in general, as U.S. shipments of appliances fell about 6 percent due to the housing slump.
But operating profit in the States increased 41 percent as cost cuts from the 2006 purchase of Maytag and sales of higher-margin products helped offset steel and oil costs and the lower demand.
This year, Whirlpool expects industry appliance shipments to fall between 3 percent and 5 percent in the States.
Whirlpool said it would increase spending on new products and advertising this year. It also said it was raising prices worldwide to cover rising metal and oil expenses, and promised to align operating costs with lower expected demand levels in the U.S. and Europe.
The company said last week it would close two refrigerator plants and migrate their production to other locations. Whirlpool has cut more than 5,000 jobs as it consolidated facilities since buying Maytag in March 2006, which operated higher-cost plants.
“I wouldn’t be surprised to see more of these smaller facilities, particularly the ones operated by Maytag, shutting down,” said one analyst.
Whirlpool forecast 2008 profit of $8.50 to $9 a share from continuing operations. Analysts currently expect $8.94, according to Reuters.