By Austen Hufford
Whirlpool Corp. raised its profit outlook for the year, saying it was better controlling costs and continuing to benefit from the higher prices it is charging for appliances.
The Benton Harbor, Mich.-based manufacturer said higher prices would offset higher costs related to raw materials and tariffs, as it reported second-quarter results Monday. The company now expects earnings this year of $14.75 a share to $15.50 a share, up from its previous forecast of $14.00 to $15.00, after excluding one-time items.
Shares fell 1.3% in after-hours trading Monday. Whirlpool still expects to be hit by higher raw material and tariff costs, but at a lower level than previously expected. Whirlpool now thinks it will have $150 million of higher costs this year, down from $200 million to $250 million previously. Whirlpool had $300 million in higher costs in 2018.
Chief Executive Marc Bitzer said the company was able to push through the price increases while keeping costs low, even as the company faced soft demand in several of its markets, including in Europe.
The company said higher prices of its kitchen appliances and cost-cutting efforts helped increase profit, while lower production volumes and currency fluctuations offset some of the gains.
The Trump administration imposed washing-machine tariffs last year after Whirlpool asked for protection from what it called unfair foreign competition. Whirlpool then raised prices on its domestically produced washing machines. Whirlpool has said that the price increases were related to higher raw material costs, which are partially related to a separate set of tariffs on imported steel and aluminum.
The increased prices have reduced sale volumes but improved the company's domestic margins. In North America, the company sold 1.1% fewer appliances but made 2.8% more revenue. Whirlpool said revenue in its second quarter rose 0.9% to $5.19 billion. The company's cost of products sold fell 0.1%.
In all, the company reported a profit of $67 million, or $1.04 a share, compared with a loss of $657 million, or $9.50 a share, in the same period a year before. Last year's quarter was affected by goodwill impairments.
On an adjusted basis, the company reported earnings per share of $4.01, up from $3.20.
Write to Austen Hufford at firstname.lastname@example.org
(END) Dow Jones Newswires
July 22, 2019 17:49 ET (21:49 GMT)Copyright (c) 2019 Dow Jones & Company, Inc.