On July 24, 2024, Whirlpool Corp (WHR, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Whirlpool Corp, a leading manufacturer and marketer of home appliances, operates through five segments: Domestic Appliances (MDA) North America, MDA Europe, MDA Latin America, MDA Asia, and Small Domestic Appliances (SDA). The company's product portfolio includes major appliances like refrigeration, laundry, cooking, and dishwashing, as well as small domestic appliances such as the KitchenAid stand mixer. Its international brands include Whirlpool, KitchenAid, Maytag, Consul, and Brastemp.
Performance Overview
Whirlpool Corp reported a GAAP net earnings margin of 5.5% and GAAP earnings per diluted share of $3.96, significantly surpassing the analyst estimate of $2.12. However, the company’s revenue of $3,989 million fell short of the estimated $3,948.82 million, marking a 16.8% decline from the previous year’s $4,792 million.
Despite the revenue shortfall, Whirlpool Corp achieved sequential margin expansion globally and in MDA North America, driven by promotional pricing actions. The company also reported double-digit net sales growth in SDA Global, MDA Latin America, and MDA Asia.
Financial Achievements and Challenges
Whirlpool Corp's ongoing EBIT margin stood at 5.3%, with ongoing earnings per diluted share at $2.39, down 43.2% from $4.21 in the same period last year. The company continues to make progress towards its cost reduction goals, aiming to deliver $300-$400 million in savings for 2024.
Our solid Q2 results and actions put us firmly on track towards expanding our margins sequentially throughout 2024," said Marc Bitzer, Chairman and CEO.
However, the company faces challenges, including a 5.7% decline in net sales for MDA North America and a 40.7% drop in EBIT for the same segment. These declines were attributed to unfavorable price/mix, although promotional pricing actions helped mitigate some of the impact.
Segment Performance
| Segment | Net Sales ($M) | EBIT ($M) | % of Sales |
|---|---|---|---|
| MDA North America | $2,567 | $163 | 6.3% |
| MDA Latin America | $895 | $52 | 5.8% |
| MDA Asia | $340 | $21 | 6.2% |
| SDA Global | $187 | $26 | 13.9% |
Income Statement Highlights
Whirlpool Corp reported a gross margin of $626 million, down from $816 million in the previous year. Operating profit also saw a decline, coming in at $130 million compared to $303 million last year. The company’s net earnings available to Whirlpool increased to $219 million from $85 million, a 157.6% rise.
Balance Sheet and Cash Flow
As of June 30, 2024, Whirlpool Corp's total assets stood at $17,343 million, with total liabilities of $13,984 million. The company reported a free cash flow of $(713) million, a decline from $(587) million in the same period last year. Cash provided by operating activities was $(485) million, down from $(370) million.
We completed our organizational simplification actions in the second quarter, putting us on track to deliver our cost take out goal of $300-$400 million," said Jim Peters, Chief Financial and Administrative Officer.
Analysis and Outlook
Whirlpool Corp's performance in Q2 2024 highlights both achievements and challenges. While the company has successfully expanded its margins and achieved significant cost savings, it continues to face revenue declines in key segments. The ongoing cost reduction initiatives and strategic pricing actions are expected to support future profitability.
For the full year 2024, Whirlpool Corp expects GAAP earnings per diluted share of approximately $3.00, impacted by a non-cash charge related to the Europe transaction. The company has revised its ongoing earnings per diluted share to approximately $12.00, with cash provided by operating activities expected to be around $1.05 billion and free cash flow at approximately $500 million.
Value investors and potential GuruFocus.com members can find more detailed insights and analysis on Whirlpool Corp's financial performance by visiting the 8-K filing.
Explore the complete 8-K earnings release (here) from Whirlpool Corp for further details.
