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Whirlpool Outlook Cut Comes as Iran War Drives Appliance Industry Downturn; Shares Tumble
Whirlpool (WHR) lowered its full-year guidance late Wednesday as record-low consumer sentiment triggered by the Iran war drove a downturn in the US appliance industry, company officials said Thursday.Shares of the appliance maker slumped 12% intraday Thursday. The stock is down 33% so far this year.The company now expects adjusted per-share earnings of $3 to $3.50 in 2026, compared with its previous estimate of $7. Analysts in a FactSet survey expect $4.83. Full-year revenue is pegged at about $15 billion, down from its prior guidance of $15.30 billion to $15.60 billion. Wall Street is looking for $15.26 billion."Consumer sentiment was already on a very low level by any historical standard, but the war in Iran amplified consumer concerns about the cost of living," Chief Executive Marc Bitzer said during an earnings call on Thursday, according to a FactSet transcript.US consumer sentiment plunged to a record low in April as near-term inflation expectations logged the biggest monthly increase in a year, the University of Michigan said last month. Energy prices have surged in the aftermath of the US-Israel war with Iran that has disrupted shipments through the Strait of Hormuz. A ceasefire between Washington and Tehran appears to be holding, with the two sides said to be closing in on a peace deal.Demand in the American appliance industry declined 7.4% in the first quarter, Bitzer told analysts."This level of industry decline is similar to what we have observed during the global financial crisis, and even higher than during other recessionary periods," he said. "While we do believe that the negative industry demand in March was somewhat of an outlier, we do not anticipate a full recovery and are now forecasting US industry demand being down by 5% on a full year base."Whirlpool reported a first-quarter adjusted loss of $0.56 per share late Wednesday, swinging from earnings of $1.70 per share a year earlier. The Street expected non-GAAP EPS of $0.38. Revenue fell 9.6% to $3.27 billion, falling short of the $3.44 billion consensus estimate."Our results in the first quarter were negatively impacted by the ongoing macroeconomic and geopolitical events that have developed since late February," Chief Financial Officer Roxanne Warner said on the Thursday call.Meanwhile, the company decided to suspend its quarterly dividend starting in the second quarter."This decision is critical to ensure we create the capacity on our balance sheet to pay down debt and fund organic growth," Warner said. Whirlpool expects to pay down more than $900 million of debt this year.The guidance cut and dividend suspension were likely needed to support Whirlpool's de-levering efforts, RBC Capital Markets analysts Mike Dahl said in a note emailed Thursday. However, these two actions may still may not be enough to "quickly fix leverage," Dahl said.Price: $47.17, Change: $-7.56, Percent Change: -13.81%
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