Whirlpool 2010 net income up 83.6%

Whirlpool may have missed the fourth-quarter earnings estimate, but the company ended a two-year earnings decline with 2010 net income of $650 million.

Benton Harbor, Mich.-based Whirlpool announced early Wednesday (Feb. 2) fourth-quarter net income of $171 million, up 80% over the same quarter of 2009. Earnings per share totaled $2.19, below the consensus Wall Street estimate of $2.26.

Whirlpool operates a refrigerator production plant in Fort Smith that employs around 1,100. The plant employed about 4,600 in early 2006. The plant began 2010 with about 2,000 employees, with an estimated 850 laid off between August and November.

For 2010, the company posted total sales of $18.366 billion, up 7.4% compared to 2009. Net income for the year was $650 million, up 83.61% over the $354 million earned in 2009.

"We improved our operating margins and strengthened our financial position for the year – all indicators that our brand-value creation strategy is working,” Whirlpool Chairman and CEO Jeff Fettig said in the earnings statement.

In Whirlpool’s North American segment, the company had 2010 sales of $2.6 billion, down 1% compared to 2009. Unit shipments from North American operations increased 5% for the year. Company officials say higher material costs and lower production volumes “partially offset” gains from cost reductions and new productivity initiatives.

“Based on the current economic outlook, the company expects full-year 2011 U.S. industry unit shipments to increase between 2 percent and 3 percent,” noted the statement.

Higher material costs and “significant global inflation” are company concerns related to 2011 financial performance. However, company officials are confident that better margins and “significant cost productivity” will result in 2011 per share earnings of up to $13 — a significant gain over the 2010 per share earnings of $7.97.

“For 2011, we expect positive but uneven demand levels around the world. Raw material inflation is driving costs higher and we expect to mitigate these costs with improvements in cost productivity, innovation and recently announced price increases,” said Fettig. “For the year, we expect to report EPS of $12.00 to $13.00 per share and free cash flow in the range of $400 million to $500 million which includes a significant cash pension contribution.”

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 $71 low. The shares were set to open Wednesday morning at $85.42.