Whirlpool Corporation Reports Second-Quarter 2018 Results

Whirlpool Corporation Reports Second-Quarter 2018 Results

Whirlpool Corporation Reports Second-Quarter 2018 Results

The FINANCIAL -- Second-quarter net sales were $5.1 billion, compared to $5.3 billion in the same prior-year period. Excluding the impact of currency, sales decreased 4.5 percent.

Second-quarter earnings before interest and taxes (EBIT)(2) were $(562) million, or (10.9) percent of sales, compared to $251 million, or 4.7 percent of sales, in the same prior-year period. Second-quarter ongoing EBIT(2) was $343 million, or 6.7 percent of sales, compared to $350 million, or 6.5 percent of sales, in the same prior-year period. On a GAAP and ongoing basis, EBIT margin was favorably impacted by product price/mix and restructuring benefits, which more than offset unit volume declines, raw material inflation and unfavorable foreign currency impacts. On a GAAP basis, results were negatively impacted by approximately $860 million due to an asset impairment charge related to the EMEA region and a preliminary settlement with the FCA.

During the second quarter, the Company obtained financing in an amount approximately equal to anticipated proceeds from the sale of its Embraco compressor business, and used such amounts to accelerate share repurchases through a "modified Dutch Auction" tender offer. The Company repurchased 6,269,591 shares at a price of $159.50 per share, for an aggregate cost of approximately $1 billion.

For the six months ended June 30, 2018, the Company reported cash used in operating activities of $(584) million, compared to $(191) million in the same prior-year period. The Company reported free cash flow(4) of $(725) million for the first six months of 2018, compared to $(356) million in the same prior-year period, primarily driven by volume-related working capital timing in addition to the timing of certain payments and accruals compared to the prior year.

SECOND-QUARTER REGIONAL REVIEW

Whirlpool North America

Whirlpool North America reported second-quarter net sales of $2.8 billion, compared to $2.8 billion in the same prior-year period. Excluding the impact of currency, sales decreased 2.2 percent.

The region reported second-quarter EBIT(3) of $331 million, or 11.9 percent of sales, compared to $336 million, or 11.9 percent of sales, in the same prior-year period. During the quarter, the favorable impact of product price/mix was offset by unit volume declines, raw material inflation, and higher freight costs.

Whirlpool Europe, Middle East and Africa

Whirlpool Europe, Middle East and Africa reported second-quarter net sales of $1.1 billion, compared to $1.2 billion in the same prior-year period. Excluding the impact of currency, sales decreased 12.3 percent.

The region reported second-quarter EBIT(3) of $(25) million, or (2.3) percent of sales, compared to $(2) million, or (0.2) percent of sales, in the same prior-year period. During the quarter, the favorable impacts of product price/mix and restructuring benefits were more than offset by unit volume declines, raw material inflation and unfavorable foreign currency impacts.

Whirlpool Latin America

Whirlpool Latin America reported second-quarter net sales of $852 million, compared to $986 million in the same prior-year period. Excluding the impact of currency, sales decreased 11.4 percent.

The region reported second-quarter EBIT(3) of $33 million, or 3.8 percent of sales, compared to $57 million, or 5.8 percent of sales, in the same prior-year period. During the quarter, both sales and EBIT(3) were negatively impacted by the trucker strike in Brazil.

Whirlpool Asia

Whirlpool Asia reported second-quarter net sales of $428 million, compared to $373 million in the same prior-year period. Excluding the impact of currency, sales increased 14.5 percent.

The region reported second-quarter EBIT(3) of $43 million, or 10.1 percent of sales, compared to $(30) million, or (8.0) percent of sales, in the same prior-year period. Ongoing EBIT(3) totaled $43 million, or 10.1 percent of sales, compared to $10 million, or 2.5 percent of sales, in the same prior-year period. On a GAAP and ongoing basis, the favorable impacts of an acquisition-related government incentive and product price/mix were partially offset by raw material inflation and unfavorable foreign currency impacts. Prior year GAAP results were negatively impacted by an out-of-period adjustment in our China business.