(Updates with additional information about geographic markets and appliance rebate program.)
By Bob Tita
Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- Whirlpool Corp.'s (WHR) third-quarter profit fell 47%, but the household appliance maker raised its profit forecast for 2009 as it slashes its costs in the U.S. and sees improving sales in Latin America and Asia.
The world's largest maker of household appliances expects appliance shipments in North America--its largest market--to fall 10% this year from 2008, compared with its previous expectation that shipments would be down as much as 12%. Whirlpool's third-quarter sales in North America slipped 9% from last year, but operating income from the region nearly doubled to $140 million as a result of the company's aggressive cost reductions and productivity improvements.
In Latin America, where the company's third-quarter sales rose 12%, the company expects appliance shipment in Brazil to increase 15% this year, up from a 10% increase seen earlier. Whirlpool also forecast a 10% increase industry appliance shipments in Asia, up from its earlier projection of flat-to-up 5%. Third-quarter sales in Asia rose 18%.
In Europe, however, sales in the quarter fell 17% and the company expects industry shipments for the region to decline about 13% for the year.
"While we continue to see uncertain and volatile demand levels in many markets, we well-positioned to develop higher 2009 earnings," Chairman and Chief Executive Jeff Fettig said in written statement.
Whirlpool raised 2009 target to about $4.25 a share, compared with its prior estimate of $3.50 to $4 a share.
Consumers have postponed purchases of appliances during the downturn in the global economy. Appliance makers also face headwinds from the slump in U.S. housing construction, tighter credit on appliance purchases and volatile raw material expenses.
The industry is hoping a $300 million federal rebate program for purchases of energy-efficient appliances will lure shoppers back to alliance retailers' show rooms. But many states' rebate programs are not expected to start until early next spring.
In September, Fettig said a sustained recovery in the appliance industry was unlikely before 2011 as demand would be choppy in 2010 with some gradual improvement as housing construction recovers.
Whirlpool reported third-quarter earnings of $87 million, or $1.15 a share, down from $163 million, or $2.15, a year earlier. The latest results included a 50-cent charge stemming from a settlement with Brazilian authorities over anti-competitive allegations in the appliance compressor industry. Revenue fell 8.2% to $4.5 billion.
Analysts surveyed by Thomson Reuters had most recently forecast earnings of 77 on $4.28 billion in sales.
Gross margin fell to 13.8% from 14%.
Shares of Whirlpool closed at $73.54 Thursday and didn't trade premarket. As of Thursday's close, they were up 78% this year.
-By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
(Nathan Becker contributed to this report)