Whirlpool (WHR), the world's largest appliance maker, is up sharply this morning after reporting Q1 results last night. While Whirlpool is its flagship brand, the company also owns other brands, including KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, JennAir, Indesit, "and other major brand names in nearly every country throughout the world."
Non-GAAP EPS rose 11% yr/yr to $3.11, which was well ahead of market expectations. Revenue fell 3.1% yr/yr to $4.76 bln, which was slightly below expectations. However, much of that miss appears to be currency-related as the strong dollar hurts WHR's results when overseas sales get converted back into US dollars. Of note, nearly half of Whirlpool's revenue comes from outside the US, so currency fluctuations do have a big impact on WHR. As such, investors are not punishing WHR for the top line miss.
Whirlpool reaffirmed guidance for the full year as it still sees non-GAAP EPS coming in around $14.00-15.00. WHR also reaffirmed its full-year guidance to "generate cash provided by operating activities of approximately $1.4-1.5 bln and free cash flow of approximately $800-900 mln."
Breaking the results down by geography, there was some notable variation. In order to neutralize the impact of currency fluctuations, we'll focus on constant currency results. In North America, Whirpool saw revenue increase +1.1% to $2.5 bln with EBIT margins increasing to 12.3% from 11.4% last year as product price/mix were partially offset by cost inflation and lower unit volumes.
Whirlpool Europe, Middle East and Africa (EMEA) saw constant currency revenue tick higher by 1.6% yr/yr to $1.0 bln. Latin America was the star of the show as constant currency revenue grew 6.7% to $875 mln. Asia was the laggard as constant currency revenue fell 11.5% yr/yr to $371 mln. The good news is that Asia represents WHR's smallest region, so its impact on the overall company is not that significant. The China/US trade war is probably hurting results there.
Our overall takeaway was that this was a very good quarter for Whirlpool. Since the company is so large and is so highly correlated to consumer spending, this is a good report for other housing-related companies.