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Whirlpool profit continues to take a hit

Whirlpool has reported lower-than-expected results for its final quarter of 2017.

The company announced a generally accepted accounting principles (GAAP) net loss of $268 million, or $3.69 per diluted share for Q4 of 2017. This included a one time, non-cash charge of approximately $420m related to tax reform.

Whirlpool Europe, Middle East and Africa reported that GAAP operating profit fell from $17 million (£11.8m), or 1.3 per cent of sales in Q4 2016, to $4m, or 0.3 per cent of sales in 2017.

Ongoing segment operating profit was at $4m, or 0.3 per cent of sales, compared with $45m, or 3.3 per cent of sales in the same period a year earlier.

Whirlpool claimed that unfavourable product price/mix and raw material inflation more than offset favourable cost productivity and restructuring benefits.

However, the company reported a growth in sales throughout the quarter, with net sales up by 1.5 per cent on a year earlier, reaching $1.4 billion. Excluding the impact of currency, sales decreased by 5.6 per cent.

The group as a whole saw falling profits as well, with GAAP operating profit for the fourth-quarter, dipping from $341m (six per cent of sales) to $267m (4.7 per cent of sales).

Ongoing operating profit fell from $431m, or 7.6 per cent of sales, to $392m, or 6.9 per cent of sales. Whirlpool said this was impacted by both unfavourable raw material inflation and declines in unit volumes.

Net sales for Q4 reached $5.7bn, an increase of one per cent compared with the same period last year. Excluding the impact of currency, sales decreased by 1.6 per cent. It reported a net loss in the fourth quarter of $268m.

For the full year, Whirlpool saw net sales of $21.3bn, compared with $20.7bn in 2016. Excluding the impact of currency, sales increased by 1.5 per cent.

Full-year GAAP operating profit was $1.1bn, a fall on the $1.4bn seen in 2016.

Full-year ongoing operating profit reached $1.5bn, a slight dip on the $1.6bn figure reported the previous year.

Said Marc Bitzer (pictured), chief executive of Whirlpool Corporation: “Our unique global strategic position, coupled with favourable macro-economic conditions, gives us strong confidence towards our long-term value creation goals. The solid fourth-quarter exit run rates, and faster than anticipated progress on price/mix and fixed cost reduction, are very encouraging in that respect.”

For the full-year in 2018, Whirlpool said it expects to generate cash from operating activities of around $1.7bn to $1.8bn.

“We are confident that our cost reduction initiatives and global price/mix will be a catalyst for significant margin improvements in the coming year,” said Jim Peters, chief financial officer of Whirlpool Corporation. “As a result, we expect to achieve our cash conversion goal and continue returning strong levels of cash to shareholders.”

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