Whirlpool Warns on Earnings
BENTON HARBOR, Mich. (AP) _ Whirlpool Corp. warned Wednesday its earnings will be below Wall Street expectations for the second half of the year partly because of retailer Circuit City’s decision to quit selling major appliances.
Its shares sank more than 6.4 percent after the announcement.
The appliance maker expects third-quarter earnings to be between 95 cents and $1.05 per share and fourth-quarter earnings to range from $1.45 to $1.55 per share.
Analysts surveyed by First Call/Thomson Financial had expected third quarter earnings of $1.52 per share and fourth quarter earnings of $1.68 per share.
On Wednesday, Whirlpool shares were unchanged from the previous day, closing at $37.88 on the New York Stock Exchange.
Circuit City announced July 25 that it was exiting the appliance business to concentrate on selling electronics and home-office products. The Richmond, Va.-based retailer said it will spend more than $1 billion during the next three years to refurbish stores nationwide and cut about 1,000 jobs in the process.
Whirlpool expects to lose between 90 and 120 days of previously expected shipments to Circuit City, or between 250,000 and 300,000 units.
``We believe that consumer demand for our brands combined with significant growth commitments from the nation’s top appliance retailers will allow us to more than replace the business we were doing with Circuit City,″ said Jeff M. Fettig, Whirlpool’s president and chief operating officer. ``We are also aggressively addressing the competitive pricing issues we face in North America and Europe, and we expect to return to more normal revenue and earnings trends during the fourth quarter.″
Whirlpool also says the European appliance industry is becoming more challenging. Varied and volatile levels of consumer demand, pricing pressures, rising costs of materials and the strength of the U.S. dollar are expected to combine to reduce revenues and earnings.
On the Net:
Whirlpool site: http://www.WhirlpoolCorp.com