The slowdown in Europe hit the world's largest appliance maker in the second quarter, cutting Whirlpool Corp. earnings and sales below Wall Street expectations.
"The European markets continue to face very challenging macroeconomic conditions which are impacting consumer demand," Whirlpool Chief Executive Officer Jeff Fettig told investors Tuesday after releasing the company's second-quarter earnings.
The Benton Harbor, Mich.-based maker of Maytag, KitchenAid and other appliances earned $113 million, or $1.43 a share, in the second quarter of this year. A year ago, Whirlpool reported a net loss of $161 million, or $2.10 a share.
Despite the improvement, Whirlpool's earnings, excluding one-time items, were $1.55 per share, which was 9 cents per below analysts' expectations for the company.
Shares of Whirlpool plunged by $5.06 per share, or more than 7.5 percent, to close at $62.25 in Tuesday's trading on the New York Stock Exchange.
Fettig said North American and Latin American businesses, including Whirlpool's 1,500-employee oven and stove manufacturing opertions in Cleveland, Tenn., "continue to perform extremely well.
"In North America, our ongoing business operating profit more than doubled year-over-year," he said. "Our cost and capacity reduction initiatives are on track to realize the expected $200 million per year cost savings benefit this year."
But Whirlpool warned that European sales are likely to fall 2 percent to 5 percent this year while raw material costs continue to rise.
"It has gotten worse," said Brian Sozzi, chief equities analyst of NBG Productions. "There is no reason for me to think that it is going to improve any time soon."
Across the 17 countries that use the euro, business activity declined in July for the sixth straight month.
Both Whirlpool and smaller rival Electrolux of Sweden have raised prices this year to offset weakness in demand in key markets.
Last week, Electrolux reported better-than-expected second-quarter earnings from improved sales in emerging markets.
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