What happened
Shares of Whirlpool Corporation (WHR 0.54%), a leading major home appliance company, are plunging 14% as of 10:49 a.m. EDT Tuesday after the company released second-quarter results following Monday's market close.
So what
It was a surprisingly rough quarter for Whirlpool investors as the appliance maker recorded a quarterly loss and sales that fell short of analysts' estimates. The company lost $657 million, or $9.50 per share, compared to the prior year's earnings of $189 million, or $2.52 per share. Adjusted for one-time items, however, Whirlpool's earnings checked in at $3.20 per share during the second quarter, still lower than the prior year's $3.35 and short of analysts' calling for $3.43 per share. Sales checked in at $5.1 billion for the second quarter, which was also below analysts' estimates of $5.3 billion.
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"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, in a press release. "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."
Now what
Management noted that rising raw material costs hindered results in three of its four regional markets during the second quarter, and the only region without increasing costs, Latin America, had other headwinds such as a Brazilian trucker strike. Between rising material costs and unfavorable foreign currency impacts, it's easy to understand investors' concern and the 14% sell-off on Tuesday.
