Tags: whirlpool | shares | stock | steel | costs | tariffs

Whirlpool Stock Sinks With Raw Material Costs Climbing Around the World

Whirlpool Stock Sinks With Raw Material Costs Climbing Around the World
(Mohamed Ahmed Soliman | Dreamstime)

Tuesday, 24 July 2018 02:12 PM

Home appliance manufacturer Whirlpool Corp. said U.S. tariffs on Chinese goods including steel contributed to an increase in raw materials costs in its U.S. business, CEO Marc Bitzer said during an investor call on Tuesday.

Whirlpool shares (WHR.N)  tumbled 14 percent to $129.96 in midday New York Stock Exchange trading. The stock fell to its lowest level in more than two years.

On Monday, the Benton Harbor, Michigan-based company reported second-quarter profit that fell short of Wall Street estimates.

Analysts at Credit Suisse lowered the price target on Whirlpool to $175 from $195 after the earnings report.

Bitzer told investors that rising costs in raw materials, unit volume decline and foreign currency volatility contributed to a slump in earnings in the second quarter. The company said it expects raw material inflation to hit $350 million in 2018.

“Uncertainty related to tariffs and global trade actions have also led to increased cost of certain strategic components and finished goods import and export,” Bitzer said.

The Trump administration slapped tariffs on imported washing machines earlier this year, a move that was expected to give Whirlpool a boost.

Bitzer previously praised the tariffs on washing machines during an earnings call in January, but struck a more cautious tone in April, saying the company’s raw materials costs in its U.S. laundry business had risen substantially primarily due to a separate set of tariffs on steel and aluminum.

The company increased prices on its kitchen and laundry appliances earlier this year in response to rising costs.

Whirlpool competitor LG Electronics Inc. also hiked prices on washing machines in March as a result of the tariffs.

© 2019 Thomson/Reuters. All rights reserved.

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As the Trump administration's global trade war heats up, Whirlpool Corp. is feeling the burn.
whirlpool, shares, stock, steel, costs, tariffs
Tuesday, 24 July 2018 02:12 PM
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