Whirlpool Corp. missed Wall Street expectations for quarterly earnings and issued a disappointing 2011 forecast as the world's largest appliance maker grapples with rising costs and weak global demand.
The news pushed shares of the maker of Maytag and KitchenAid appliances down 4.8 percent and raised concerns about global demand levels heading into the second half of the year.
Earlier this week, Whirlpool's Swedish rival Electrolux posted disappointing results and issued a gloomy forecast for the rest of the year, citing weak demand in mature markets such as the United States, Spain and Italy.
Even Philips, Europe's largest maker of consumer electronics, reported a surprise loss and gave a bleak outlook for the next two quarters.
The lackluster results across the board are a clear sign that the price increases pushed by appliance makers are not going down well with shoppers, Wall Street Strategies analyst Brian Sozzi said.
"It comes down to price," Sozzi said. "Whirlpool is bringing out great products, but I think they might be pricing themselves out of the market."
Whirlpool expects full-year U.S. industry unit shipments to fall by 1 to 2 percent, versus its prior forecast calling for a rise of 2 to 3 percent. North America is its largest market.
In a worrying sign, demand slowed as well in previously strong markets including India.
Shoppers around the globe are spending less on washers, dryers and other expensive items as they cope with rising food and fuel prices.
Global consumer confidence fell in the second quarter to its lowest level in 18 months as an uncertain economic outlook, a deepening euro zone debt crisis and rising inflation made people cautious, a Nielsen survey showed.
U.S. shoppers, bombarded with a daily dose of weak economic data, are particularly cautious.
"North America demand in the first half of the year has been weaker than expected," CEO Jeff Fettig told analysts on a conference call, adding, "the second quarter industry demand levels were back (at) the same levels we saw at our 2009 recession lows."
"We expect to continue to see demand volatility as consumers around the world remain impacted by economic uncertainties and high inflation," he said.
In addition to weak demand, appliance makers are fighting high costs of materials such as steel, copper and oil as well.
Whirlpool's second-quarter net loss was $161 million, or $2.10 a share, compared with year-earlier net earnings of $205 million, or $2.64 a share.
Excluding items, it earned $2.76 a share, missing the analysts' average estimate of $2.83, according to Thomson Reuters I/B/E/S.
Sales rose 4 percent to $4.73 billion but missed the analysts' average estimate of $4.74 billion.
Whirlpool's Asia unit sales fell 2 percent to $257 million, mainly on slowing industry demand in India. Excluding the currency impact, sales fell about 5 percent.
The company sees 2011 industry unit shipments in Asia rising only 4 to 6 percent, versus its April forecast of a 6 to 8 percent rise.
The company expects 2011 operating earnings per share at the low end of its prior outlook of $12 to $13 a share.
Whirlpool shares were down 4.8 percent at $72.02 on Thursday morning on the New York Stock Exchange.
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