Whirlpool Corporation Reports Record Results

BENTON HARBOR, Mich., July 20 /PRNewswire-FirstCall/ -- Whirlpool Corporation (NYSE: WHR) announced today that second-quarter 2007 net sales increased 3 percent to $4.9 billion. Net earnings from continuing operations were $161 million, or $2.00 per diluted share, up approximately 60 percent from the $100 million, or $1.26 per diluted share, reported in the same period last year.

Earnings from continuing operations for the second quarter reflect strong operating profit improvement within each of the company's international business segments, the benefit from efficiencies associated with last year's acquisition of Maytag, productivity improvements, strong cost controls, favorable currency and a lower effective tax rate. Results were adversely affected by significantly higher material costs, lower industry shipments within the United States , increased brand investment and a pension curtailment charge. Each regional business increased year-over-year operating profit margins during the quarter.

"Our international businesses continue to execute extremely well and we are pleased with their financial performance through the first half of 2007," said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. "While weak industry demand and significantly higher material prices in the United States have unfavorably impacted our results for the past year, we are positive about the trends exiting the second quarter and believe demand will begin returning to moderate growth levels in the second half of this year."

During the quarter, the company repurchased $101 million of common stock. Approximately $365 million remains under the company's $500 million share repurchase program.

Whirlpool North America reported second-quarter revenue of $3.0 billion, down approximately 6 percent versus the year-ago period primarily due to lower OEM shipments and industry demand. As expected, industry unit shipments of major appliances (T7)** declined approximately 1 percent for the quarter and 5 percent for the first half of 2007. Industry shipment trends began to improve during the quarter, following six months of high single-digit, year-over-year declines.

Operating profit of $179 million for the quarter improved over the prior year despite significant material cost increases, primarily for base metals, component parts and steel, lower industry demand, increased brand investment in support of the Maytag launch of new innovative products and a pension curtailment charge. Acquisition efficiencies, cost-based price increases and lower administrative expense mitigated the higher costs.

Based on current economic conditions, the company continues to expect full-year 2007 U.S. industry unit shipments to decline approximately 2 to 3 percent.

Whirlpool Europe reported record second-quarter revenue and operating profit. Revenue increased 10 percent to $900 million driven by strong Whirlpool brand sales performance and the impact from innovative new product offerings. Excluding currency translation, sales increased by 3 percent. Industry demand during the quarter was estimated to have increased 2 to 3 percent.

Operating profit of $51 million increased 20 percent for the quarter and margins expanded as a favorable mix, productivity improvements and reduced benefit expenses offset higher material costs during the quarter.