Whirlpool Corporation Reports First-quarter 2012 Results

Whirlpool Corporation (NYSE:WHR) announced today first-quarter net earnings of $92 million, or $1.17 per diluted share, compared to net earnings of $169 million, or $2.17 per diluted share reported during the same period last year.  The primary driver of this year-over-year change in GAAP earnings is lower tax credits of approximately $1.46 per share.  On an adjusted basis, excluding unusual items, restructuring expense, Brazilian (BEFIEX) tax credits and U.S. energy tax credits, diluted earnings per share(1) totaled $1.41 compared to $0.64 in the prior year.  Sales in 2012 were $4.3 billion, compared to $4.4 billion reported in the first quarter of 2011, decreasing 1 percent driven by weaker appliance demand, unfavorable currency and lower monetization of (BEFIEX) tax credits.
First-quarter operating profit totaled $205 million compared with $228 million in the prior year primarily driven by lower industry demand, higher material costs, reduced monetization of Brazilian (BEFIEX) tax credits and increased restructuring expense. On an adjusted basis, first-quarter operating profit(2) totaled $232 million and was up significantly from the $163 million reported in the prior year.  Continued improvement in product price/mix, cost and capacity-reduction initiatives and ongoing productivity positively impacted results during the quarter.  Strong profitability improvement in the North America and Latin America regions was partially offset by weak economic conditions in Europe.
"The first quarter was a strong start to the year as we benefited from our margin expansion efforts and continued innovation investments," said Jeff M. Fettig, Whirlpool Corporation chairman and chief executive officer.  "Our cost and capacity-reduction initiatives and previously implemented cost-based pricing actions are on track to deliver our operating profit margin, earnings and free cash flow guidance for the year."During the three months ended March 31, 2012, the company reported cash flow used in operating activities of $(423) million compared to cash flow used in operating activities of $(224) million in the prior-year period.  Current year results include $275 million related to the settlement of the Brazilian collection dispute and $58 million in U.S. pension contributions. The company continues to expect to generate free cash flow(3) between $100 million and $150 million.  Included in this guidance is the $275 million final installment to settle the Brazilian collection dispute, $110 million for antitrust settlements, pension contributions of up to $250 million and restructuring cash outlays of up to $279 million.  Strong cash generation from our business is expected to more than offset these legacy liabilities, fund our cost and capacity-reduction initiatives and new product innovation.