BENTON HARBOR, Mich. — Whirlpool Corp. is reporting that full-year 2008 earnings from continuing operations were $5.50 per diluted share compared to $8.10 per diluted share reported in the same period last year, with annual net sales decreasing 3% from $18.9 billion the prior year.
Fourth-quarter net earnings decreased 76% to $44 million, or $0.60 per diluted share, compared to $187 million, or $2.38 per diluted share reported during the previous year. Sales for the quarter decreased 19% to $4.3 billion from the $5.3 billion reported in the fourth quarter of 2007. Excluding the impact of foreign exchange translation, the company’s fourth-quarter sales declined approximately 13%.
Fourth-quarter earnings reflect lower global unit sales and production volumes, higher material and oil-related costs, and unfavorable foreign currency exchange movements compared to the fourth quarter of 2007, Whirlpool Corp. says. The company also recorded $77 million of restructuring costs compared to $15 million in the prior year, as well as a $32 million product recall expense related to a supplier quality issue.
These items were partially offset by an income tax benefit, favorable price/mix, lower incentive compensation, and cost-reduction initiatives during the quarter. The company’s results included $43 million in asset sale gains compared to $24 million of asset sale gains in the previous year.
“The severity and scope of the global economic downturn has significantly increased over the last several months and had a significant impact on consumer demand in all parts of the world,” says Jeff M. Fettig, Whirlpool Corp. chairman and chief executive officer. “We have moved very quickly to adjust our business to much lower demand levels by significantly reducing costs and production levels while continuing to focus on providing our trade customers with an ongoing cadence of innovation, which represents great value to consumers.”
During the fourth quarter, Whirlpool Corp. accessed its existing $2.2 billion credit facility and is in full compliance with its bank covenants. Given the generally negative and highly volatile global economic climate and the challenges in global credit markets, the company is proactively taking steps to assure its future financial flexibility, the company says. Whirlpool Corp. has initiated discussions with banks to seek additional flexibility within its capital structure.