Benton Harbor, Michigan - Whirlpool Corp. said its first-quarter earnings of $94 million were 24 percent lower than in the same period of 2007, while revenue of $4600 million for the quarter showed a 5 percent rise over that in Q1 2007. And the refrigerator maker put part of the blame on high increases in raw materials costs.
"Our first-quarter results reflect a very challenging global economic environment," said Jeff Fettig, chairman and chief executive officer of the major household appliance maker, in the company's earnings release.
Strong performance in its international business was offset by a decline in North America, he said, going on to emphasise a combination of "unprecedented material cost increases and seven consecutive quarters of lower US demand." These factors have resulted in "one of the most challenging operating environments we have seen in three decades," Fettig said
Despite this, the washing machine and refrigerator maker feels its innovative products and strong brands can capitalise on global growth opportunities. The group has taken strong actions on the material and oil-cost inflation that has cut margins, Fettig added.
Based on current conditions, Whirlpool said, it now expects unit shipments for the full year in the US to decline about 5 percent to 6 percent from 2007 levels, those in Europe to drop 2-3 percent, while the refrigerator maker expects to see rises of 5-8 percent in Latin America and 5 percent in Asia.
"Macroeconomic challenges, primarily material and oil-related costs, have intensified," said Fettig, so that Whirlpool is reducing its full-year outlook. To improve results Whirlpool plans cost-based price increases and will step up productivity initiatives, he added.