October 23, 2015 / 10:30 AM / 2 years ago

Whirlpool shares slide on pricing, forex concerns

(Reuters) - Shares of Whirlpool Corp (WHR.N) tumbled on Friday on concerns about price cuts by rival appliance makers and the strong dollar’s impact on foreign revenue.

An employee stands next to a Whirlpool washing machine inside a home appliances showroom in New Delhi August 27, 2013. REUTERS/Anindito Mukherjee

Promotional pricing and deep discounts by some foreign competitors eroded market share in the third quarter, President and Chief Operating Officer Marc Bitzer said on a conference call following Whirlpool’s third-quarter earnings report.

“Nobody wants to hear about pricing getting more competitive in any kind of retail environment,” analyst Megan McGrath at MKM Partners said. “Typically it is not a good sign for the health of the industry and the impact on the top line and the potential for margins.”

Executives on the call did not detail how they plan to regain market share, McGrath noted.

Whirlpool shares fell 7.92 percent to $147.15.

Chief Executive Jeff Fettig told analysts that rapid currency depreciation, including those of Brazil, Canada, Russia and the European Union, would reduce 2015 annual sales by about $2.5 billion.

Fettig also said declining demand in Brazil, China, Russia and Ukraine would reduce annual sales by about $900 million.

Whirlpool, the world’s largest appliance maker, lowered its forecast for 2015 earnings per share but third quarter earnings were higher than expected.

Whirlpool revised its full-year outlook for ongoing business earnings to $12 to $12.50 per diluted share from $12 to $13. Analysts had estimated $11.96, according to Thomson Reuters data.

The revised outlook was “undoubtedly” better than expected, RBC Capital Markets analyst Robert Wetenhall said.

The company said changes in the 2015 outlook reflected weaker sales in Latin America, the stronger U.S. dollar and an effort to improve margins.

Overall, third-quarter sales jumped 9 percent to $5.3 billion from $4.8 billion a year ago, slightly below expectations of $5.41 billion.

The company lowered its estimated 2015 full-year capital spending to a range of $700 million to $750 million, down from a previously forecast $750 million to $800 million.

The company posted a higher quarterly net profit of $235 million, up from $230 million a year ago, citing cost and capacity cuts, acquisitions, and a favorable price mix.

Its ongoing business earnings per diluted share rose to $3.45 from $3.04, beating the $3.29 expected by analysts.

Reporting by Meredith Davis; Editing by Richard Chang

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