Whirlpool (WHR.US) Tumbles Over 13% After Q2 Earnings Miss Expectations

According to our source, Whirlpool (WHR.US) plummeted over 13% in after-hours trading on Tuesday due to its second-quarter earnings missing market expectations. The report shows that Whirlpool's Q2 sales fell 5.4% year-over-year to $37.7 billion, below the market's consensus estimate of $38.5 billion; adjusted earnings per share were $1.34, also below the market's consensus estimate of $1.68.

North America sales fell 4.7% year-over-year to $24.46 billion, while Latin America sales dropped 10% year-over-year to $8.06 billion; Asia region sales fell 5.9% year-over-year to $3.20 billion.

Whirlpool CEO Marc Bitzer said, "As expected, our second-quarter earnings continued to be impacted by competitors stockpiling Asian imports in the US. Despite this, we remain well-positioned in the North American market with strong new product pipelines, industry-leading US manufacturing base and favorable housing demand fundamentals."

Looking ahead, Whirlpool maintained its full-year sales guidance of $158 billion; adjusted earnings per share are expected to be between $6-8 (lower than the previous estimate of $10), below market consensus of $8.96. The company also plans to reduce quarterly dividend from $1.75 per share to $0.90 per share.

Whirlpool is taking steps to offset increased tariffs costs and plans to implement approximately $2 billion in structural cost reduction measures. Despite this, the company still expects US trade policy to ultimately lead to a boost, as competitors are likely to raise prices for foreign-made washing machines, refrigerators, and dishwashers.

Whirlpool also expects to benefit from a healthier housing market. The company says that present home sales recovery should drive higher demand for appliances in the medium to long term, while US multi-year supply shortages followed by years of housing expansion should provide further long-term growth space.