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Whirlpool cost-cutting initiatives help boost earnings

Keywords: Tags  Whirlpool, earnings report, appliances, Jeff Fettig, cost-cutting initiatives, corinna petry

CHICAGO — Appliance manufacturer Whirlpool Corp. posted global net income of $401 million in 2012, up 2.8 percent from $390 million the previous year despite a 2.8-percent decline in sales to $18.14 billion.

Its North American business generated operating earnings of $846 million in 2012, a more-than-twofold increase thanks to cost- and capacity-cutting initiatives last year. North American sales saw a slight uptick to $9.63 billion even though shipments fell 5 percent to 24.3 million appliances.

"Our actions have clearly produced the expected improvement in operating margins, resulting in strong earnings per share and underlying cash flow," chairman and chief executive officer Jeff M. Fettig said in a Jan. 31 statement.

"We successfully improved operating margins through our cost-based price increases, product mix, cost- and capacity-reduction initiatives and ongoing productivity programs," he added. "Those actions, combined with improving trends in U.S. housing and growth opportunities in emerging markets, create positive momentum going into 2013."

The Benton Harbor, Mich.-based appliance manufacturer anticipates a 2- to 3-percent industrywide increase in North American appliance shipments this year.

A more competitive cost structure, name-brand popularity and new product introductions "have positioned us well for global industry demand recovery," Fettig said. "We will continue funding our business and executing our long-term growth strategy."

Latin American shipments improved 6.8 percent to 12.6 million appliances in 2012, although sales fell 2.2 percent and operating earnings declined nearly 26 percent. The company expects industry shipments in the region to increase 3 to 5 percent this year.

Whirlpool posted a $51-million operating loss for Europe, the Middle East and Africa on a 13.1-percent drop in sales. Shipments fell 6.4 percent to 11.6 million appliances last year, and they are expected to be flat in 2013.

The company expects appliance shipments in Asia to grow 3 to 5 percent this year following a slight uptick to 4 million units last year. Operating earnings in the region improved 22.3 percent despite sales falling 3.8 percent.

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