Whirlpool has cut its full-year earnings outlook as it reported a major asset writedown in its European business, currency volatility and raw material inflation for its April-to-June period.
The US firm, which earlier this year launched its first full suite of connected appliances, said global sales for the quarter were $5.1 billion (£3.9bn), down from $5.3bn the year before and reported a net loss of $639 million. This was down from a net earnings gain of $179m in the previous quarter.
An $860m asset impairment charge in its European business and an antitrust settlement in France contributed to Whirlpool’s troubles in the quarter.
But more concerning was the impact of higher steel prices and rising resin prices, which the company said outweighed the “favourable” affect of higher appliance prices.
Earlier this year, US President Donald Trump introduced a 25 per cent tariff on imported steel in addition to a 10 per cent tariff on aluminium.
In the first quarter, the rising costs hit Whirlpool’s North American and European results by $25m.
The company said it was cutting its earnings outlook as it anticipated continuing weak sales around the world as well as higher costs of raw materials. It now expects adjusted earnings per share between $14.20 and $14.80, down from its previously guided range of earnings per share between $14.50 and $15.50.
“We are pleased to deliver margin expansion in a very challenging cost environment, driven by strong North America margins and significant global price/mix improvement during the second quarter,” said Marc Bitzer, chief executive officer of Whirlpool Corporation.
“Despite these positives, our performance in EMEA was below expectations. As a result, we are taking strong actions to improve our operational execution, and remain confident that we will deliver value for our shareholders in the coming quarters.”
Whirlpool brands include KitchenAid, Indesit and Hotpoint in EMEA and Asia.