Whirlpool Corp. predicted better-than-expected earnings growth in the first quarter due to an improving outlook for the US appliance market. Based on appliance-industry conditions in January and Febru…
Whirlpool Corp. predicted better-than-expected earnings growth in the first quarter due to an improving outlook for the US appliance market. Based on appliance-industry conditions in January and February, Whirlpool said on 26 February that it expects per-share core earnings in the quarter to increase 15% to 20% from the US$ 1.10 a share the company earned a year earlier. Analysts polled by Thomson Financial/First Call are looking for earnings of about US$ 1.23 a share. The company is likely to benefit from a strong housing market. Data released by the National Association of Realtors showed that seasonally adjusted existing homes sold at an annual rate of 6.04 million units in January, up 16% from 5.2 million units in December, and surpassing the previous record of 5.49 million units in August 2001. January“s sales levels bode well for the economy and companies such as Whirlpool in the coming months because home buyers often spend heavily on appliances and other items. Whirlpool also expects to record US$ 100 million to US$ 150 million in restructuring costs in 2002. That is part of the US$ 300 million to US$ 350 million in charges it will record for the programme, which was announced in December 2000. The company expects the restructuring to yield annual savings of US$ 225 million to US$ 250 million. Whirlpool also confirmed reports that it plans to acquire Grupo Vitro SA“s (VTO) 51% stake in appliance-manufacturer Vitromatic, a joint venture between Whirlpool and Vitro, for US$ 150 million in cash and the assumption of US$ 220 million in debt. The deal makes Whirlpool Mexico“s second-largest maker of “white goods,“ behind Mabe SA, a Mexico City company in which General Electric Co. (GE) holds a 48% stake.