Whirlpool profits hit by ‘liability expenses’
Whirlpool has seen a decrease in sales in Europe, Middle East and Africa, reporting negative impacts from legacy product ‘warranty and liability expenses’.
The appliance manufacturer reported third-quarter net sales in EMEA of $1.3 billion (£1.06bn), a decrease of six per cent when compared with $1.5 billion in the same period a year ago.
On-going business segment operating profit also fell by a third to $48 million (£39.2m), compared with $71m in Q3 2015.
However, on a GAAP (Generally Accepted Accounting Principles) basis, which many believe allows greater comparability with other companies’ results, operating profit in the region increased to $40m, compared with $32m last year.
The company said it was still expecting full-year 2016 industry unit shipments to be flat to up to two per cent.
Globally, the company saw a slight dip in net sales, reporting $5.2bn in the third-quarter, compared with $5.3bn for the same period last year. However, this was impacted by currency as Whirlpool saw a slight increase in sales in the quarter.
Group operating profit totalled $370m, up from the $329m in the same quarter last year.
Marc Bitzer, president and chief operating officer of Whirlpool Corporation, said: “In Europe, the UK environment remains challenging, but we continue to execute brand and product transitions, while adjusting our production levels to right-size our inventory.”
Whirlpool Corporation chairman and chief executive Jeff Fettig (pictured) added: “We are confident that our previously deployed plans will deliver a record year of performance with strong revenue growth and margin expansion as we manage through continued challenges in a volatile global environment. “Our long-term strategic priorities remain unchanged and we will continue to deliver shareholder value through the execution of our priorities and a balanced approach to capital allocation.”