Whirlpool Dips to a 52-Week Low, Input Costs a Major Concern
In the past three months, shares of this Benton Harbor, MI-based company have lost 16.3% compared with its industry’s 17.6% decline. However, the S&P 500 index grew 4.6% in the same time frame.That said, let’s take a closer look at the factors impacting the company’s performance.Rising Input Cost a Major BarrierWhirlpool’s operating results continued to be hurt by significant raw material cost inflation. Also, the company witnessed significantly higher raw material costs in three of its four regional markets, including North America, Asia and EMEA.Though operating margin expanded year over year, it was somewhat marred by raw material inflation, unit-volume declines and unfavorable currency. While management expects to gain from a favorable product price/mix through the rest of the year, it might be partly offset by lower global-revenue growth and increased raw material inflation.Dismal Q2 Results Triggered Downtrend in EstimatesWhirlpool’s sales and earnings not only missed the Zacks Consensus Estimate but also declined on year-over-year basis. Over the last 60 days, the company’s Zacks Consensus Estimate of $15.24 and $17.95 for 2018 and 2019 moved south by $1.04 and $1.25, respectively.Wrapping UpAlthough Whirlpool’s strong product pipeline, innovation and other efforts to improve margins remain on track, rising raw material costs have been spoil sport. It has a long-term earnings growth rate of 10.8% and a Zacks Rank of 2.Today's Stocks from Zacks' Hottest StrategiesIt's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.And this outperformance has not just been a recent phenomenon.