Benton Harbor, MI-based Whirlpool Corp. (WHR) is in the process of expeditiously integrating the Indesit Company S.p.A and Hefei Rongshida Sanyo Electric Co. Ltd. acquisitions into its business. Further, ahead of the investor day, to be held on Dec 17, 2014 in Chicago, IL, and taking into account the charges related to the integration of the above mentioned businesses, the company initiated its fiscal 2015 guidance and updated its fiscal 2014 outlook.
The company termed the acquisition of the Indesit and Hefei businesses, which were acquired in October this year, as transformational with the potential to provide persistent growth via a balanced and leading geographic portfolio. Further, it expects speeding up of the integration activities for these businesses to boost its revenues, synergies and earnings. Also, through these acquisitions, the company is looking to offer innovative products to its customers around the globe.
While these acquisitions are slated to provide ample synergies, when fully integrated, they will also attract significant costs during the integration process. Keeping the impact of these charges in view, Whirlpool has tweaked its earnings forecast for fiscal 2014 and accordingly initiated guidance for fiscal 2015.
The company now expects to report fiscal 2014 GAAP earnings in the range of $8.00–$8.20 per share against the previous guidance of $9.40–$9.90 per share. On an adjusted basis, the company estimates earnings per share in the range of $10.90–$11.10 per share compared with $11.50–$12.00 per share guided earlier. However, for 2014, the company retained its target of generating $650–$700 million of free cash flow.
For fiscal 2015, the company forecasts earnings per share (on a GAAP basis) in the range of $10.75–$11.75, while adjusted earnings per share are expected to come in the $14.00–$15.00 range. Further, the company expects to generate free cash flow in the band of $700–$800 million. The free cash flow guidance includes restructured cash outlays of up to $250 million, capital expenditures in the range of $800–$850 million and U.S. pension contributions of nearly $85 million.
Further, providing a gist of the investor day, to be held later in this week, the company revealed that it will outline its strategy and long-term financial targets, discuss growth opportunities across its businesses and showcase global product innovations during the event.
Currently, Whirlpool carries a Zacks Rank #3 (Hold). Better-ranked stocks in the related industry include Select Comfort Corporation (SCSS), Leggett & Platt Inc. (LEG) and Norcraft Companies, Inc. (NCFT). While Select Comfort holds a Zacks Rank #1 (Strong Buy), Leggett and Norcraft carry a Zacks Rank #2 (Buy).
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