Whirlpool, one of the largest U.S. home appliance makers, said it expects a full-year loss this year as a slumping housing market and weak consumer spending cut into demand. High interest rates have slowed home sales and dampened demand for big-ticket appliances such as refrigerators and washing machines, while rising raw material and logistics costs have further squeezed profitability. The guidance fell far short of market expectations, sending the stock sharply lower.
Whirlpool said in its earnings release that it expects an adjusted loss of $1.30 a share for the full year, according to The Wall Street Journal on the 26th. That marks a steep reversal from the adjusted profit of $7 a share the company projected in January.
On a U.S. generally accepted accounting principles basis, the company expects a loss of $4.95 a share this year, swinging from earnings of $5.66 a share last year.
Third-quarter revenue fell 8.8% to $3.677 billion (about 4.87 trillion won) from $4.033 billion (about 5.34 trillion won) a year earlier. The figure also missed analysts' estimates of about $3.9 billion.
Net loss available to common shareholders came to $249 million (about 329.7 billion won) in the quarter, compared with net income of $73 million (about 96.7 billion won) a year earlier. The adjusted loss, excluding one-time items, was $0.21 a share, well below market forecasts for a profit.
Margins also deteriorated. Adjusted operating profit fell 46.1% to $97 million (about 128.5 billion won) from $180 million (about 238.4 billion won) a year earlier. The adjusted operating margin narrowed to 2.6% from 4.5%.
By segment, the North America major appliance business was the weakest performer. Revenue there fell 8.3% from a year earlier to $2.495 billion (about 3.30 trillion won), while operating profit plunged 44.7% to $74 million.
Revenue at the Latin America major appliance business rose 6.9% to $858 million (about 1.14 trillion won). Operating profit there, however, dropped 61.3% from a year earlier to $18 million (about 23.8 billion won), hurt by a shift in product mix.
The U.S. housing downturn is seen as the biggest factor behind the deterioration. With high mortgage rates and elevated home prices weighing on transactions, consumers have been postponing purchases of expensive appliances such as refrigerators and washing machines, reducing demand across the industry.
Weaker purchasing power amid inflation is another drag. Analysts said households are prioritizing essential spending, slowing replacement demand for major appliances.
Rising costs for raw materials, fuel and logistics have added to the burden. The company is raising product prices and pursuing structural cost cuts, but those steps have not fully offset the increases.
Whirlpool plans to raise prices on major appliances in North America by 7% in the fourth quarter. It also plans to lift prices in Latin America by as much as 10%.
The company is also restructuring, cutting jobs, realigning production facilities and shrinking its distribution network. It is phasing out operations at a plant in Mexico and closing some distribution centers to reduce fixed costs.
The savings from those measures are expected to show up in earnest from next year. "Price increases and structural cost actions contributed to sequential improvement in third-quarter profitability, but the pace of the economic recovery has been slower than expected," Chief Executive Marc Bitzer said. "These actions are laying the groundwork for further earnings improvement in 2027."
Whirlpool guided for full-year revenue of about $14.5 billion (about 19 trillion won), roughly 6.5% below the $15.5 billion it reported last year. On a comparable basis, the decline is about 1.5%, since last year's results included an India business that has since been sold.
The company also plans to move faster on strengthening its balance sheet. Whirlpool expects about $700 million (about 927 billion won) in cash from operating activities and about $300 million (about 397.3 billion won) in free cash flow this year. It aims to cut net debt to below $4.5 billion (about 6 trillion won) by year-end.
Whirlpool had earlier suspended its dividend to ease the financial strain. Some analysts said the company's struggles show the U.S. housing slump is spreading into durable consumer goods industries such as home appliances.
Whirlpool shares fell more than 8% in after-hours trading following the earnings release. In the regular session on the 26th, the stock dropped 8.5% to its lowest close since March 2009.