Due to inflation increases and timing of price rises, Whirlpool (NYSE 🙂 has lowered its FY EPS outlook.

Whirpool’s ongoing earnings per share were $5.31. This is a decrease of $7.20 from the previous year and higher than the consensus estimate of $4.79. The quarter’s net sales were $4.92 Billion, which was 8.2% lower YoY than the consensus estimate of $5.3 Billion.

North America net sales fell 8.3% YoY to $2.79billion. It was also less than analysts’ consensus of $3.14billion.

Whirlpool predicts an ongoing EPS of between $24- $26, down from $27- $29 in its previous guidance and lower than the analyst expectation of $25.99 per share. The full-year net sales growth is expected to be between 2% and 3%.

FY operating cash flows are expected to average between $1.25 billion to $1.5 billion. That’s unchanged from previous forecasts and is lower than the consensus projection of $1.3 million.

“The fundamental strength of consumer demand trends remain intact and the disciplined execution of our go-to market actions position us to deliver another strong year of performance in 2022”

WHR increased its buyback authorization to $2 billion. WHR also revealed that it is initiating a strategic review for its EMEA business.

BofA analyst Elizabeth Suzuki reaffirmed a neutral rating because she considers both medium-term upside as well as downside risks to be balanced. Suzuki is focused on the US market, which is the “key profit center for WHR.”

“The company remains optimistic about the demand backdrop for 2022. We are more cautious on the three key factors of appliance demand: 1) Appliance replacement (about half of demand)—which was accelerated in 2020-2021 due to increased appliance usage during the pandemic, and leaving less pent-up demand; 2) new housing (about 10-15% of demand)—which we expect to be somewhat pressured by rising mortgage rates and affordability concerns; 3) discretionary renovation demand,” she said in a client note.

Raymond James analyst Sam Darkatsh focused on the “EMEA-xit.”

“Most importantly, Whirlpool announced the initiation of a strategic review of its EMEA business (to be completed by 3Q22), presumably including a potential outright sale of the entire business. Recall we wrote a differentiated “think piece” about the possible benefits of selling the European business in 2019. Our all-in EBITDA ranges from $150 to 200M each year, and we also believe that tangible EMEA assets are between $5-6 BILLION. We find the Board’s recent $2B increase of the share repurchase authorization as a possible indicator of reasonable net proceeds, should a sale be consummated,” Darkatsh wrote.

Today, Whirlpool shares are up 3.5%

By Senad Karaahmetovic