Whirlpool income dips in third quarter, up year-to-date

Whirlpool Corp. posted third-quarter net income of $79 million, down 9.1% compared to the same quarter of 2009, but the company’s net income for the first nine months of 2010 is up 92.2% over the 2009 period.

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

The Benton Harbor, Mich.-based global appliance maker’s per share earnings were $1.15 for the quarter.

However, the earnings were reduced by at least $91.8 million from a U.S. Justice Department fine issued in September. The $140 million in fines was levied against Whirlpool and Panasonic for conspiring to fix prices of refrigerant compressors. Without the fine, Whirlpool’s per share earnings were $2.22, ahead of market estimates of $1.76.

"As expected, we faced a challenging environment during the quarter which resulted in a significant slowing in sales growth compared to the first half of the year," Jeff M. Fettig, chairman and CEO of Whirlpool Corp., said in a statement.

The company reduced its estimate on shipments from its North American unit — which includes its Fort Smith plant. The new guidance is that shipments will increase 3% in 2010, down from the previous estimate of 5%.

"As we have previously noted, we continue to see a volatile and rapidly changing global economy, which we expect to continue in the near term," Fettig noted. "The actions we have put in place have allowed us to offset negative environmental factors and maintain our full-year adjusted earnings outlook."

Third quarter sales in the North American segment were $2.4 billion, down 3% from the 2009 period. Unit shipments during the quarter were up 1% compared to the 2009 period.

An Oct. 19 report from Wall Street Equity research was bullish on the appliance sector.

“Overall, appliance manufacturers are still weathering the down economy but many saw sales improve with the stronger retail data. A preference for environmentally products is not likely to taper and could also continue to benefit appliance makers moving forward,” noted analysis from Wall Street Equity.

Also, an Oct. 7 ratings upgrade — lifted to “positive” from “stable” — of Whirlpool by Standard & Poor’s suggested that the company will remain healthy despite the headwinds of a sluggish economy.

"The outlook revision to positive from stable reflects our expectation that profits should remain near current levels even under a scenario of weak sales performance and modestly higher input costs, allowing for additional credit measure improvement over the next 12 to 24 months," S&P noted in the upgrade memo.

Whirlpool shares (NYSE: WHR) have been volatile in the past year. During the past 52 weeks, the share price has ranged from a $118.44 high to a $68.90 low. The shares were set to open Wednesday morning at $84.52.