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Whirlpool's 1st-quarter earnings jump

/ Source: The Associated Press

Whirlpool Corp.’s union with former rival Maytag Corp. is off to a good start, Whirlpool’s top executive said Tuesday as his company reported a 37 percent increase in first-quarter earnings.

Jeff Fettig, Whirlpool’s chairman and chief executive officer, told industry analysts during a teleconference that the company’s first priority is “to efficiently and effectively integrate the Maytag business into Whirlpool.”

Whirlpool surpassed analysts’ expectations by reporting first-quarter earnings of $118 million, or $1.70 per share, compared with $86 million, or $1.26 per share, in the same period last year.

A consensus of analysts surveyed by Thomson Financial had predicted earnings per share of $1.52. Benton Harbor-based Whirlpool said it benefited from strong trade and consumer demand for its products.

Sales rose 10 percent to $3.5 billion, from $3.2 billion.

The results do not include Maytag’s performance, which will be detailed in Whirlpool’s second-quarter earnings. Expenses of $13 million related to the takeover were included in the first-quarter operating profit, which improved 19 percent to $216 million.

Shares of Whirlpool rose $1.14, or 1.3 percent, to $91.64 in afternoon trading on the New York Stock Exchange. The stock has traded in a 52-week range of $60.78 to $96.08.

Fettig said the results reflect the company’s 19th consecutive quarter of year-over-year sales improvement.

“Industry demand remains positive, and we continue to maintain our outlook on the strength of the economic environment despite volatile commodity prices,” he said.

Record unit shipments, sales growth and a positive product mix combined with productivity improvements to offset acquisition expenses, higher commodity prices, higher new-product introduction costs and increased restructuring costs.

Results also benefited from a reduced effective tax rate, officials said.

Whirlpool completed its acquisition of Newton, Iowa-based Maytag on March 31, the final day of the first quarter. The value of the deal was about $1.79 billion, or $2.6 billion including the assumption of Maytag debt.

Fettig and other Whirlpool leaders declined to reveal much information Tuesday about the consolidation of the two companies.

“They didn’t want to say much about Maytag, but the company did intimate that they have better growth opportunities with Maytag than without, which I think is very clear,” said Laura A. Champine, an analyst with Memphis, Tenn.-based Morgan Keegan & Co. who follows the major-appliance industry.

Whirlpool has scheduled a May 23 teleconference to provide analysts with more details about the acquisition and to offer broad guidance for 2006 and 2007.

“The integration of Maytag is progressing well and according to our plan,” Fettig told analysts. “We’re very encouraged with the progress that we’ve made over these last three weeks, and we’re looking forward to sharing these plans with you.”