A clean fourth quarter from appliance maker Whirlpool (WHR) on Monday could go a long way to jump starting the stock.
Despite continued soft consumer demand for appliances in North America and China, Whirlpool managed to trounce Wall Street profit forecasts for the quarter. Its initial profit outlook for 2020 also came in better than analysts feared.
Net sales: $5.4 billion vs. estimates for $5.52 billion
Gross profit margin: 19.47% vs. estimates for 16.78%
Earnings per share: $4.95 excluding items vs. estimates for $4.27
Noteworthy: All divisions profitable.
2020 earnings per share outlook: $16.00 to $17.00 vs. estimates for $16.28 a share
Whirlpool shares popped 2% in after-hours trading. The stock has lagged the S&P 500 over the past year, rising 19.5% compared to a 23% gain for the S&P 500.
Whirlpool CEO Marc Bitzer tells Yahoo Finance the U.S. consumer is in good shape this year to support purchases of appliances. Bitzer adds Whirlpool’s bottom line should also be boosted in 2020 amid efforts to streamline operations.
For Whirlpool, the quarter is a long overdue win.
Whirlpool spent much of 2019 caught in the crosshairs of President Trump’s trade war with China, a key market for the appliance giant. The tit-for-tat tariff battle essentially raised the cost of doing business for Whirlpool. The company was forced to respond with price increases on its products at the expense of volume growth.
Meanwhile, Wall Street generally came away from Whirlpool’s important 2019 investor day concerned that long-term margin targets were too ambitious given sluggish demand in the U.S., China and Europe. The worries in effect overshadowed Whilrpool’s strong work in removing excess from its business, notably by exiting under-performing overseas businesses.