Whirlpool 2Q earnings up 164%; company raises 2010 outlook

Whirlpool Corp. posted second-quarter net income of $205 million, a gain of 164% over the same quarter of 2009, thanks to improved sales in North America and Latin American.

Whirlpool operates a refrigerator production plant in Fort Smith that employs about 2,000. The plant employed about 4,600 in early 2006.

The Benton Harbor, Mich.-based global appliance maker’s per share earnings were $2.64, handily beating market estimates of $2.13. The income was generated from total quarterly revenue of $4.534 billion, up 8.7% compared to the same period of 2009.

For the first six months of 2010, Whirlpool net income is $389 million, up 144.6% compared to $159 million in net income for the 2009 period. Revenue for the first six months of 2010 was up 13.8% over the 2009 period.

“We made strong progress towards our long-term value creation goals during the second quarter," Jeff M. Fettig, Whirlpool chairman and CEO, said in a statement. "Global unit volume growth combined with our ongoing productivity improvements enabled us to expand our operating margins and accelerate profitable growth."

More importantly for Whirlpool’s Fort Smith plant, second-quarter sales in the company’ North American segment were up 6% to $2.5 billion. North America unit shipments increased 7% in the quarter. Gains in sales and operating profit in the segment were credited to cost reduction, productivity initiatives and increased sales volume.

“Based on the current economic outlook, the company expects full-year 2010 U.S. industry unit shipments to increase approximately 5 percent compared to the previous expectation of a 3 percent to 5 percent increase,” noted Whirlpool’s earnings statement.

Many appliance industry watchers have said Whirlpool and other appliance makers are benefitting from federal tax credits for consumers who buy newer, energy-efficiency appliances. U.S. Sen. Blanche Lincoln, D-Ark., was at Whirlpool’s Fort Smith plant July 16 to lobby for renewal of the tax credits. Kenny Thompson, division vice president for Whirlpool, said during the Lincoln press conference that production of energy efficient appliances in Fort Smith has resulted in the addition of 970 jobs in 2010. The plant employs around 2,000.

Whirlpool execs raised the full-year earnings from the $8-$8.50 range to $9-$9.50. Company execs, however, remain wary of “fragile” global economic conditions.

“We have made strong progress toward our key operating priorities in 2010," Fettig noted in the statement. "While we continue to expect general economic conditions to remain volatile, we have put actions in place to position the company to effectively manage through these challenges. With continued strong execution throughout our global operations, we expect to deliver a record year of earnings per share in this fragile global economic environment."

Despite the upbeat earnings report, Whirlpool shares (NYSE: WHR) fell more than 5% in early morning trading to below $87 per share. During the past 52 weeks, the share price has ranged from a $118.44 high to a $50.08 low.