ATLANTA – Appliance maker Whirlpool Corp. (WHR) on Thursday reported a 15 percent drop in first-quarter profit as price increases boosted sales but failed to fully offset higher oil and steel costs.
The results topped Wall Street estimates and Whirlpool's shares were up more than 7 percent in early trading.
"Whirlpool positively surprised on better U.S. margins and market share progress across all its markets," Eric Bosshard, an analyst with FTN Midwest Research, said in a research note.
The maker of KitchenAid (search) and Whirlpool products reaffirmed its previous forecast for full-year earnings, citing "great success" in executing price increases amid a "challenging" cost picture.
First-quarter profit came to $86 million, or $1.26 a share, down from $101 million, or $1.43 a share, a year earlier.
Analysts on average had expected earnings of $1.11 a share, according to Reuters Estimates.
Sales climbed 6.7 percent to $3.21 billion as Whirlpool raised prices worldwide.
In North America, Whirlpool's largest market, sales rose 4.5 percent as overall industry shipments declined. Though steel and oil-related costs lowered operating profit for the region, the company cited "very strong consumer demand" for the Kenmore HE4t front-loading washer and dryer it makes for Sears (SHLD), now available in new colors such as Pacific blue.
Across other regions, sales were up 7 percent in Europe, 16 percent in Latin America and 7.6 percent in Asia.
Whirlpool said price rises, productivity gains and a lower effective tax rate helped offset much of the $190 million in higher materials costs in the quarter. Whirlpool, Maytag Corp. (MYG) and other appliance makers raised U.S. prices at least 5 percent at the beginning of this year.
Whirlpool reaffirmed its previous forecast for full-year profit of $5.90 to $6.10 a share. Analysts on average expect earnings of $5.83 a share for the full year.
Higher costs of steel and oil are stinging appliance makers. On Wednesday, Sweden's Electrolux said pretax profit fell 27 percent in the first quarter and added it may close two plants.
Whirlpool stock gained $4.84, or 7.85 percent, to $66.48, while Maytag shares were up about 2.67 percent, or 38 cents, at $14.60, both on the New York Stock Exchange.