The world's biggest home appliance maker continued to cut costs in the third quarter, but Whirlpool Corp.'s profit fell 47 percent as shoppers are still holding off on big-ticket purchases during the recession.
The cost savings did lead Whirlpool to raise its full-year earnings guidance even though it still sees economic uncertainty ahead. The company, which is based in Benton Harbor, Michigan, has cut jobs and closed a factory to deal with lower sales.
Whirlpool, whose brands include Maytag and KitchenAid as well as its namesake, earned $87 million, or $1.15 per share. That's down from $163 million, or $2.15 per share, a year earlier.
Quarterly results included $43 million, or 50 cents per share, for a settlement with the Brazilian competition commission.
Sales for the three months ended Sept. 30 dropped 8 percent to $4.5 billion from $4.9 billion. Removing foreign currency fluctuations, revenue dipped about 3 percent.
The performance handily topped the estimates of analysts polled by Thomson Reuters for a profit of 77 cents per share on revenue of $4.28 billion. Analysts' estimates generally exclude one-time items.
Whirlpool has found that many shoppers are still putting off appliance purchases amid a recession complicated by tight credit and falling housing prices, both of which hurt the market for appliances.
In its North America division, revenue dropped 9 percent as U.S. industry unit shipments of major appliances declined 6 percent. The European unit faced a 17 percent dropoff in revenue, with overall industry unit demand down about 10 percent.
Whirlpool's Latin American unit fared better, with sales up on increased Brazilian appliance demand. Sales also improved for its Asian business.
To deal with shrinking demand for its products, Whirlpool has trimmed jobs and shuttered a refrigerator factory in Evansville, Ind. In August the company disclosed in a regulatory filing that it would face $51 million in costs related to the plant's closing and 1,100 job cuts.
Not all is bleak for the appliance maker. Earlier this month Whirlpool said its Fort Smith, Ark. refrigerator factory might call back 150 employees who were laid off because demand was starting to improve. But the company noted that it needed to ensure that it would have the parts on hand to increase production.
Whirlpool raised its full-year profit forecast, saying its cost-cutting has helped it deal with softer demand. The appliance maker now expects earnings of about $4.25 per share, up from a prior outlook for profit of $3.50 to $4 per share.
"Our improved outlook reflects our success in restructuring our business to aggressively align our capacity and resources to lower demand levels," Chairman and CEO Jeff M. Fettig said in a statement.
Analysts expect earnings of $4.05 per share for the year.