Published on October 26th, 2017 | by The GC Team0
Whirlpool “not satisfied” with operating margins – Q3 2017 results
Whirlpool Corporation has reported third-quarter net sales up more than 3% to $5.4 billion compared to the same period last year, but GAAP operating profit declined from $374 million to $331 million.
Whirlpool said the business experienced significantly elevated raw material prices in 2017 which are now expected to further increase through 2018.
Earlier this month the company announced global cost-based price increases, expected to cover a majority of its business, to be implemented during the fourth quarter of 2017 and the first quarter of 2018.
It also announced an initiative to reduce fixed overhead costs by $150 million which will be implemented early 2018. This in addition to ongoing cost productivity efforts.
Announcing the third-quarter results, CEO Marc Bitzer said: “We are pleased with our revenue growth and free cash flow improvement but are not satisfied with our operating margins, which were impacted by raw material inflation, unfavourable price/mix and slow progress on our European integration. Thus, we are implementing strong actions to deliver our long-term goals, including recently announced global cost-based price increases and a fixed cost reduction initiative.”
Margins in the Europe, Middle East and Africa region suffered under the slow progress in the integration of Indesit Company, acquired by Whirlpool in 2014, margin compression in the UK due to Sterling devaluation against the Euro, and raw material inflation of around $20M.