Bear of the Day: Whirlpool (WHR)

Headquartered in Benton Harbor, MI, Whirlpool Corporation (WHR) is one of the largest manufacturers of home appliances in the world. The company’s portfolio of products includes laundry appliances, refrigerators and freezers, cooking appliances, and other small household appliances such as dishwashers and mixers.

Disappointing Results

The company reported disappointing Q3 results—missing on both the top and bottom lines. Adjusted EPS of $3.83 was short of the Zacks Consensus Estimate of $3.90. This was their fifth consecutive earnings miss and second straight revenue miss.

"We are pleased with our revenue growth and free cash flow improvement but are not satisfied with our operating margins, which were impacted by raw material inflation, unfavorable price/mix and slow progress on our European integration," said the CEO.

The management also reduced earnings guidance for 2017 due to rising costs and unfavorable price/mix. Shares plunged after the report.

Falling Estimates

Analysts have lowered their estimates for the company after weak earnings. Zacks Consensus Estimates for the current and the next fiscal year have fallen to $13.86 per share and $15.79 per share from $14.62 and $17.18 respectively, before the results.

Sears Stops Selling Whirlpool Appliances

Last month, the struggling retailer announced that it would stop selling Whirlpool appliances, breaking a partnership of over 100 years. The decision was driven was pricing disagreements between the two and changing market dynamics.

The Bottom Line

The stock has fallen to a Zacks Rank #5 (Strong Sell) after results as analysts continue to slash their estimates. Additionally, the stock has Style Score of “D” for Growth and “F” for Momentum. Further, Zacks Industry Rank in the bottom 7% also indicates some more pain ahead. Investors should avoid the stock for the time being.

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