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Why Is Whirlpool (WHR) Down 10.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Whirlpool (WHR - Free Report) . Shares have lost about 10.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Whirlpool due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Whirlpool Beats on Q1 Earnings, Cuts 2022 EPS View
Whirlpool Corporation posted mixed first-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate, while the top line missed the same. Both metrics declined year over year. Management trimmed earnings view for 2022.
An Insight Into Q1
The appliance maker delivered adjusted earnings of $5.31 per share, down 26.3% from $7.20 earned in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of $4.90. This marks WHR’s 15th straight earnings beat.
Net sales of $4,920 million dropped 8.2% from the year-ago quarter’s levels. The top line missed the Zacks Consensus Estimate of $5,402 million. Excluding the unfavorable impacts of foreign exchange, net sales amounted to $4,988 million, down 6.9% year over year. However, net sales improved 13.8% and adjusted organic net sales grew 17.3% from the respective 2020 levels on gains from healthy underlying demand for products.
Go-to-market actions generated 600 basis points of price/mix along with a positive contribution from each region around the globe. Management is focused on accelerating the portfolio transformation with a major focus on higher-margin businesses.
The gross profit for first-quarter 2022 was $851 million, down 25.9% from $1,148 million reported in the year-ago quarter.
Adjusted EBIT of $463 million declined 30.3% from $664 million in the year-ago quarter. Adjusted EBIT margin of 9.4% fell 300 basis points (bps) year over year in spite of higher inflation of above $400 million.
Regional Performances
Net sales for the North America segment decreased 8.3% year over year to $2,791 million. Excluding the currency impact, sales in the region dropped 8.3%. The segment’s EBIT fell 25.1% year over year to $454 million, while the EBIT margin contracted 360 bps to 16.3%, driven by operating headwinds and inflation, partly offset by higher cost-based prices.
Net sales for the EMEA segment were down 7.4% year over year to $1,084 million. Excluding currency impacts, sales in the region dipped 0.5%. The segment reported an EBIT loss of $27 million against an EBIT of $21 million.
Net sales from Latin America increased 3.8% year over year to $760 million, driven by cost-based pricing increases. Excluding the currency impacts, sales in the region rose 0.8%. The segment’s EBIT of $54 million declined 12.9% from the year-ago period’s levels. The EBIT margin contracted 140 basis points to 7.1%, mainly affected by inflation, somewhat offset by higher sales.
Net sales in Asia declined 30.7% year over year to $285 million, mainly due to the divestiture of Whirlpool China. Excluding the currency impacts, sales for the region were down 28.8%. The segment’s EBIT of $14 million reflected a 36.6% decline from $21 million reported in the year-ago quarter. The segment’s EBIT margin of 4.8% decreased 30 basis points from the prior-year quarter’s level, affected by inflation and partly offset by cost-based price increases.
Other Financial Details
As of Mar 31, 2022, Whirlpool had cash and cash equivalents of $2,114 million, a long-term debt of $4,631 million and a stockholders’ equity of $4,575 million, excluding non-controlling interests of $170 million.
During the first three months of 2022, Whirlpool used cash of $328 million from operating activities, while reported an adjusted free cash flow of a negative $415 million. WHR incurred a capital expenditure of $87 million in the same period.
In the reported quarter, management bought back $533 million of shares and raised the share repurchase authorization $2 billion. Whirlpool had $2.9 billion available for buybacks. Also, WHR hiked the quarterly dividend 25% to $1.75 per share, delivering 10 straight years of dividend increase.
Outlook
For 2022, Whirlpool envisions net sales growth of 2-3%, down from the previous guidance of 5-6%. On a GAAP and ongoing basis, Whirlpool expects earnings per share of $24-$26, lower than $27-$29 anticipated earlier. Management anticipates a tax rate of 24-26% for 2022 on both GAAP and adjusted basis.
Whirlpool expects cash provided by operating activities of $1.95 billion compared with the earlier projection of $2.2 billion, and a free cash flow of $1.25 billion compared with the previous forecast of $1.5 billion for 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -18.16% due to these changes.
VGM Scores
Currently, Whirlpool has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Whirlpool has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Whirlpool (WHR) Down 10.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Whirlpool (WHR - Free Report) . Shares have lost about 10.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Whirlpool due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Whirlpool Beats on Q1 Earnings, Cuts 2022 EPS View
Whirlpool Corporation posted mixed first-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate, while the top line missed the same. Both metrics declined year over year. Management trimmed earnings view for 2022.
An Insight Into Q1
The appliance maker delivered adjusted earnings of $5.31 per share, down 26.3% from $7.20 earned in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of $4.90. This marks WHR’s 15th straight earnings beat.
Net sales of $4,920 million dropped 8.2% from the year-ago quarter’s levels. The top line missed the Zacks Consensus Estimate of $5,402 million. Excluding the unfavorable impacts of foreign exchange, net sales amounted to $4,988 million, down 6.9% year over year. However, net sales improved 13.8% and adjusted organic net sales grew 17.3% from the respective 2020 levels on gains from healthy underlying demand for products.
Go-to-market actions generated 600 basis points of price/mix along with a positive contribution from each region around the globe. Management is focused on accelerating the portfolio transformation with a major focus on higher-margin businesses.
The gross profit for first-quarter 2022 was $851 million, down 25.9% from $1,148 million reported in the year-ago quarter.
Adjusted EBIT of $463 million declined 30.3% from $664 million in the year-ago quarter. Adjusted EBIT margin of 9.4% fell 300 basis points (bps) year over year in spite of higher inflation of above $400 million.
Regional Performances
Net sales for the North America segment decreased 8.3% year over year to $2,791 million. Excluding the currency impact, sales in the region dropped 8.3%. The segment’s EBIT fell 25.1% year over year to $454 million, while the EBIT margin contracted 360 bps to 16.3%, driven by operating headwinds and inflation, partly offset by higher cost-based prices.
Net sales for the EMEA segment were down 7.4% year over year to $1,084 million. Excluding currency impacts, sales in the region dipped 0.5%. The segment reported an EBIT loss of $27 million against an EBIT of $21 million.
Net sales from Latin America increased 3.8% year over year to $760 million, driven by cost-based pricing increases. Excluding the currency impacts, sales in the region rose 0.8%. The segment’s EBIT of $54 million declined 12.9% from the year-ago period’s levels. The EBIT margin contracted 140 basis points to 7.1%, mainly affected by inflation, somewhat offset by higher sales.
Net sales in Asia declined 30.7% year over year to $285 million, mainly due to the divestiture of Whirlpool China. Excluding the currency impacts, sales for the region were down 28.8%. The segment’s EBIT of $14 million reflected a 36.6% decline from $21 million reported in the year-ago quarter. The segment’s EBIT margin of 4.8% decreased 30 basis points from the prior-year quarter’s level, affected by inflation and partly offset by cost-based price increases.
Other Financial Details
As of Mar 31, 2022, Whirlpool had cash and cash equivalents of $2,114 million, a long-term debt of $4,631 million and a stockholders’ equity of $4,575 million, excluding non-controlling interests of $170 million.
During the first three months of 2022, Whirlpool used cash of $328 million from operating activities, while reported an adjusted free cash flow of a negative $415 million. WHR incurred a capital expenditure of $87 million in the same period.
In the reported quarter, management bought back $533 million of shares and raised the share repurchase authorization $2 billion. Whirlpool had $2.9 billion available for buybacks. Also, WHR hiked the quarterly dividend 25% to $1.75 per share, delivering 10 straight years of dividend increase.
Outlook
For 2022, Whirlpool envisions net sales growth of 2-3%, down from the previous guidance of 5-6%. On a GAAP and ongoing basis, Whirlpool expects earnings per share of $24-$26, lower than $27-$29 anticipated earlier. Management anticipates a tax rate of 24-26% for 2022 on both GAAP and adjusted basis.
Whirlpool expects cash provided by operating activities of $1.95 billion compared with the earlier projection of $2.2 billion, and a free cash flow of $1.25 billion compared with the previous forecast of $1.5 billion for 2022.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -18.16% due to these changes.
VGM Scores
Currently, Whirlpool has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Whirlpool has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.