By Arunima Banerjee
(Reuters) – Whirlpool Corp’s
The company’s report comes two days after U.S. President Donald Trump slapped steep tariffs on imported washing machines, a move that Whirlpool expects will boost demand and one that deals a heavy blow to its rivals, Samsung Electronics <005930.KS> and LG Electronics <066570.KS>.
The two South Korean companies – which hold a quarter of a U.S. market dominated by Whirlpool and General Electric Co
Indeed, LG said earlier on Wednesday that it would raise prices of most of its washers in the United States. Whirlpool has added 200 jobs at its plant in Clyde, Ohio, in anticipation of higher demand.
Whirlpool, which also makes products such as refrigerators and cooking appliances, has also hiked prices for some of its products to counter the impact of higher costs for raw materials such as steel. Such price hikes will continue this quarter.
But, the Benton Harbor, Michigan-based company said the benefits of cost controls and higher prices were more than offset by rising raw material costs and a drop units sold.
As a result, Whirlpool’s fourth-quarter revenue was $5.70 billion, with the 0.8 percent rise the slowest in five quarters.
Analysts were expecting revenue to increase 3.2 percent to $5.84 billion, matching the company’s third-quarter growth rate, according to Thomson Reuters I/B/E/S.
Revenue in North America, Whirlpool’s biggest market, fell marginally, while sales of units worldwide dropped 4.4 percent.
The company’s 2018 adjusted profit forecast of $14.50 to $15.50 per share also missed analysts’ estimates of $15.52.
Whirlpool, which owns brands such as KitchenAid and Maytag, posted a $268 million loss in the fourth quarter, compared with a $180 million profit a year earlier, due to a $420 million charge related to the U.S. tax reforms.
Excluding the charge, its earning of $4.10 per share handily beat estimates of $3.99.
Whirlpool’s shares fell about 1 percent to $177 in after-hours trading. They had gained 7.4 percent in the two days since the tariffs were imposed.
(Reporting by Arunima Banerjee in Bengaluru; Editing by Savio D’Souza)