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Whirlpool (WHR) to Report Q2 Earnings: Is a Beat in Store?

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Whirlpool Corporation (WHR - Free Report) is slated to release second-quarter 2020 results on Jun 22, after the closing bell. Notably, the company delivered a positive earnings surprise of 8.1% in the last reported quarter. Moreover, the bottom line beat estimates by 7%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s second-quarter earnings stands at 65 cents, indicating an 83.8% decline from the year-ago quarter’s reported figure. However, the consensus mark has increased 44.4% in the past seven days. For second-quarter revenues, the consensus mark is pegged at $3,466 million, suggesting a 33.2% decline from the prior-year quarter’s reported figure.

Key Points to Note

The spike in demand for the home and kitchen products, particularly Air Purifiers, is likely to have aided Whirlpool’s sales for the second quarter. The company’s top line for the second quarter is likely to include gains from strong market demand for its HEPA Air Purifier, which is capable of removing as much as 99.97% of particles from the air. Moreover, the company remains focused on enhancing e-commerce portals and improving direct-to-consumer capabilities as most consumers have shifted to online shopping habits due to the coronavirus-induced lockdown. Thus, strong online sales are likely to have contributed meaningfully to the second-quarter results.

Moreover, the company has been gaining from cost-containment efforts, which provided a cushion to the otherwise soft results in the first quarter due to the coronavirus pandemic. It is on track with its cost-based price increments and cost-reduction initiatives, gains from which should get reflected in the second-quarter margins. Moreover, it targeted more than $500 million of net cost takeout from actions such as curtailing structural and discretionary costs, capturing raw material deflation opportunity, effectively managing working capital and syncing supply chain and labor levels with demand. These endeavors are likely to have provided some cushion to the bottom line in the second quarter.

However, supply-chain disruptions, a slowdown in production activities and reduced demand for several commodities stemming from the coronavirus outbreak are likely to have hurt the top line in the second quarter.

Whirlpool Corporation Price and EPS Surprise

What the Zacks Model Says

Our proven model predicts 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Whirlpool has a Zacks Rank #3 and an Earnings ESP of +32.72%.

Other Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Hanesbrands (HBI - Free Report) currently has an Earnings ESP of +79.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Rent-A-Center (RCII - Free Report) currently has an Earnings ESP of +3.39% and a Zacks Rank #2.

Netflix, Inc. (NFLX - Free Report) presently has an Earnings ESP of +1.52% and a Zacks Rank #3.

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