Whirlpool Corporation (NYSE: WHR) in the third quarter of FY 17 has missed the estimates by the analysts for both the bottom-line and the topline. The company management said that the margins are under pressure due to ongoing raw material inflation and an unfavorable product sales mix. The slow progresses on its European integration are also hurting the company’s profit margins. The global cost-based prices increases are being pushed to Whirlpool customers in the fourth quarter and the first quarter of 2018. As a result, WHR shares fell almost 10% at one point in after-hours trading and were recently off 6.6% at $170.50, having ended at $182.50 when the U.S. stock market closed. Overall, for the third quarter, WHR has reported profit of $276 million from $238 million, in the same period a year ago.
WHR in the third quarter of FY 17 has reported the adjusted earnings per share of $3.83, missing the analysts’ estimates for the adjusted earnings per share of $3.90. The company had reported the adjusted revenue growth of 3 percent to $5.42 billion in the third quarter of FY 17, missing the analysts’ estimates for revenue of $5.49 billion.
The company now expects in to earn $11.10 to $11.40 a share for 2017, down from an earlier estimate for full-year earnings-per-share of $12.40 to $12.90 and compared to $14.62 consensus. WHR’s projection included up to $175 million in costs related to restructuring, up from a second-quarter estimate of $165 million.
In addition, for the full-year 2017, Whirlpool Corporation expects to generate cash from operating activities of $1.55 to $1.6 billion and free cash flow of approximately $900 million. Included in this projection are primarily acquisition-related restructuring cash outlays of up to $175 million, legacy product warranty and liability costs of $70 million, pension contributions of $45 million and, with respect to free cash flow, capital spending of $650 to $700 million.
Additionally, Whirlpool Corporation has announced an initiative to reduce fixed overhead costs by $150 million, which will be implemented in early 2018. This initiative is in addition to the Company’s ongoing cost productivity efforts.
Furthermore, WHR has repurchased approximately $200 million of common stock during the third quarter and plans to continue repurchasing common stock this year. WHR stock has risen 9.16% in a year (source: Google Finance).