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Will Whirlpool (WHR) Beat Q3 Earnings Countering Inflation?
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Whirlpool Corporation (WHR - Free Report) is slated to release third-quarter 2023 results on Oct 23, after the closing bell. The household appliance company is expected to have witnessed revenue growth in the to-be-reported quarter.
For third-quarter revenues, the Zacks Consensus Estimate is pegged at $4.79 billion, suggesting a 0.2% rise from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for third-quarter earnings has been unchanged in the past 30 days at $4.31. However, the consensus mark for earnings indicates a 4% decrease from the year-ago quarter’s reported figure.
The company delivered an earnings surprise of 10.8% in the last reported quarter. Also, the bottom line beat estimates by 7.2%, on average, over the trailing four quarters.
Whirlpool has been witnessing a challenging macro environment and sluggish demand from rising inflation. The company has been witnessing muted consumer sentiments from inflation and increasing interest rates, along with unfavorable currency.
Despite improvements in supply-chain conditions, Whirlpool has been witnessing supply-chain disruptions in some parts of the world. The company has also been witnessing an unfavorable product price/mix and high raw material costs. All these factors are likely to have marred its margin performance across most regions in third-quarter 2023.
We anticipate the company’s gross margin to contract 350 basis points (bps) in the third quarter of 2023. Gross profit is expected to increase 26.1% year over year in the quarter. The company is likely to have witnessed an increase in SG&A expenses, partly offsetting its operating margin. Our model indicates a 7% increase in SG&A expenses on a year-over-year basis, with a 50-bps increase in the SG&A rate. The operating margin for the third quarter is expected to expand 210 bps to 7.6%.
Nonetheless, Whirlpool is on track with early and decisive actions to protect margins and productivity amid the ongoing supply-chain constraints and significant inflationary pressures. The company has been implementing cost takeout actions, including curtailing structural and discretionary costs, capturing raw material deflation opportunities, effectively managing working capital, and syncing supply chain and labor levels with demand.
WHR announced significant cost-based price increases of 5-18% in various countries. The company also launched a cost takeout program worth $500 million, which is likely to have reduced fixed and variable costs. Management has been on track with its cost takeout actions and expects $800-$900 million related to gains from the aforementioned measures and eased raw material inflation.
On the last reported quarter’s earnings call, management pointed out that it was optimistic about the structural strength of its North America business. Management believed that its actions would aid in delivering strong results in North America. This is expected to include a 100-bps sequential margin expansion in every quarter of 2023.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Whirlpool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Whirlpool currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Marriott International (MAR - Free Report) currently has an Earnings ESP of +4.23% and a Zacks Rank #3. MAR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.9 billion, suggesting 11.2% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Marriott’s third-quarter earnings is pegged at $2.09, suggesting year-over-year growth of 23.7%. The consensus mark has been unchanged in the past 30 days.
IMAX (IMAX - Free Report) currently has an Earnings ESP of +60.00% and a Zacks Rank #3. IMAX is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $89 million, suggesting 29.5% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for IMAX’s third-quarter earnings is pegged at 15 cents against a loss of 5 cents reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.
Mattel (MAT - Free Report) currently has an Earnings ESP of +3.99% and a Zacks Rank #3. MAT is likely to register top and bottom-line growth when it reports third-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.8 billion, suggesting 3.6% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Mattel’s third-quarter earnings is pegged at 85 cents, suggesting 3.7% growth from the year-ago quarter. The consensus mark has moved up 2.4% in the past 30 days.
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Will Whirlpool (WHR) Beat Q3 Earnings Countering Inflation?
Whirlpool Corporation (WHR - Free Report) is slated to release third-quarter 2023 results on Oct 23, after the closing bell. The household appliance company is expected to have witnessed revenue growth in the to-be-reported quarter.
For third-quarter revenues, the Zacks Consensus Estimate is pegged at $4.79 billion, suggesting a 0.2% rise from the prior-year quarter’s reported figure. The Zacks Consensus Estimate for third-quarter earnings has been unchanged in the past 30 days at $4.31. However, the consensus mark for earnings indicates a 4% decrease from the year-ago quarter’s reported figure.
The company delivered an earnings surprise of 10.8% in the last reported quarter. Also, the bottom line beat estimates by 7.2%, on average, over the trailing four quarters.
Whirlpool Corporation Price and EPS Surprise
Whirlpool Corporation price-eps-surprise | Whirlpool Corporation Quote
Key Points to Note
Whirlpool has been witnessing a challenging macro environment and sluggish demand from rising inflation. The company has been witnessing muted consumer sentiments from inflation and increasing interest rates, along with unfavorable currency.
Despite improvements in supply-chain conditions, Whirlpool has been witnessing supply-chain disruptions in some parts of the world. The company has also been witnessing an unfavorable product price/mix and high raw material costs. All these factors are likely to have marred its margin performance across most regions in third-quarter 2023.
We anticipate the company’s gross margin to contract 350 basis points (bps) in the third quarter of 2023. Gross profit is expected to increase 26.1% year over year in the quarter. The company is likely to have witnessed an increase in SG&A expenses, partly offsetting its operating margin. Our model indicates a 7% increase in SG&A expenses on a year-over-year basis, with a 50-bps increase in the SG&A rate. The operating margin for the third quarter is expected to expand 210 bps to 7.6%.
Nonetheless, Whirlpool is on track with early and decisive actions to protect margins and productivity amid the ongoing supply-chain constraints and significant inflationary pressures. The company has been implementing cost takeout actions, including curtailing structural and discretionary costs, capturing raw material deflation opportunities, effectively managing working capital, and syncing supply chain and labor levels with demand.
WHR announced significant cost-based price increases of 5-18% in various countries. The company also launched a cost takeout program worth $500 million, which is likely to have reduced fixed and variable costs. Management has been on track with its cost takeout actions and expects $800-$900 million related to gains from the aforementioned measures and eased raw material inflation.
On the last reported quarter’s earnings call, management pointed out that it was optimistic about the structural strength of its North America business. Management believed that its actions would aid in delivering strong results in North America. This is expected to include a 100-bps sequential margin expansion in every quarter of 2023.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Whirlpool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Whirlpool currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Marriott International (MAR - Free Report) currently has an Earnings ESP of +4.23% and a Zacks Rank #3. MAR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.9 billion, suggesting 11.2% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Marriott’s third-quarter earnings is pegged at $2.09, suggesting year-over-year growth of 23.7%. The consensus mark has been unchanged in the past 30 days.
IMAX (IMAX - Free Report) currently has an Earnings ESP of +60.00% and a Zacks Rank #3. IMAX is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $89 million, suggesting 29.5% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for IMAX’s third-quarter earnings is pegged at 15 cents against a loss of 5 cents reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.
Mattel (MAT - Free Report) currently has an Earnings ESP of +3.99% and a Zacks Rank #3. MAT is likely to register top and bottom-line growth when it reports third-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.8 billion, suggesting 3.6% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Mattel’s third-quarter earnings is pegged at 85 cents, suggesting 3.7% growth from the year-ago quarter. The consensus mark has moved up 2.4% in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.