Friday, January 31, 2014
Whirlpool 4Q Earnings
Whirlpool released their fourth quarter earnings on January 30th in which they beat top line but fell seven cents short consensus bottom line revenues. Whirlpool ended the year with record revenues of $18.8 billion and net income of $827 million or $10.24 a share doubling y-o-y. For the fourth quarter Whirlpool saw a 9% increase in North America, 7.7% increase in Latin America, 6.7% increase in EMEA and a 12.8% decrease in Asia due to weaknesses in India. The rise in revenue is a result of increased demand for their innovative products. Gross margin expanded a100 basis points from 16.9% to 17.9% and operating margin expanded 170 basis points from 6.4% to 7.6% from the fourth quarter in 2012. Whirlpool provided guidance for 2014 anticipating $12.00-$12.50 a share. WHR’s stock price has grown 42.36% over the past year which outperforms the S&P 500. With that in mind I still feel that Whirlpool is undervalued and that my thesis is still intact. Whirlpool continues to be a good stock and we should continue to see its price climb over the next few years.