Whirlpool Analyst Dissects Q1 Print, Says Guidance Reflects Lower Tariffs, Raw Material Tailwinds

Whirlpool Corporation WHR reported first-quarter adjusted earnings per share Monday ahead of Street expectations and reiterated its full-year guidance, mainly on the back of lower input cost inflation, including tariffs, according to Raymond James.

The Analyst

Sam Darkatsh reiterated a Market Perform rating on Whirlpool.

The Thesis

The home appliances manufacturer reported first-quarter adjusted EPS of $3.11, handsomely beating the consensus estimate of $2.86.

Total first-quarter sales declined by 3 percent year-on-year, despite 2-percent growth in organic sales, Darkatsh said in a Monday note. (See the analyst's track record here.) 

EBITDA for the quarter came in at $440 million, marginally short of the consensus expectation of $444 million. This is likely to have resulted from a sequential D&A decline that was higher than the Street had expected, partly due to the timing of restructuring in , Europe and the Middle East, the analyst said. 

While North America and Latin America performed ahead of expectations, performance in Europe and the Middle East was slightly disappointing, Darkatsh said. 

Whirlpool maintained its 2019 adjusted EPS guidance at $14-$15. This implies adjusted EPS of $10.89-$11.89 from the second through fourth quarters, he said. The appliance maker also kept its total sales and ongoing EBIT margin guidance unchanged.

“We believe new guidance includes not only expected benefits from lower tariffs, but also some steel and resin tailwinds," the analyst said. 

Price Action

Whirpool shares were trading up by 0.63 percent to $140.24 at the time of publication Tuesday. 

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