TLDR
- The appliance manufacturer recorded a first-quarter loss of 56 cents per share, falling short of analyst expectations for a 38-cent profit
- For the first time in seven decades, Whirlpool eliminated its quarterly dividend payment
- Annual earnings projections were reduced dramatically from $7.00 to $3.00–$3.50 per share
- Shares of WHR declined 11.9% to finish at $48.21 on Thursday’s trading session
- Management pointed to tariff volatility and demand levels comparable to a recession as primary factors
Shares of Whirlpool ended Thursday’s session at $48.21, registering an 11.9% decline following the company’s unexpected first-quarter loss announcement and the elimination of its dividend program.
The home appliance giant reported a first-quarter deficit of 56 cents per share against revenues of $3.3 billion. Analysts surveyed by Wall Street had anticipated earnings of 38 cents per share on $3.4 billion in revenue. During the same period last year, the company generated earnings of $1.70 per share on sales totaling $3.6 billion.
Management also made significant downward revisions to its full-year profit outlook. The company now projects annual earnings between $3.00 and $3.50 per share, a substantial reduction from the previous forecast of $7.00. Additionally, free cash flow expectations were lowered from $450 million to $300 million.
The elimination of the dividend represented the most shocking development for investors. The company had maintained quarterly dividend payments of 90 cents per share—continuing this tradition through ten U.S. economic recessions and every significant global emergency since the 1950s. Just last year, the dividend was reduced by approximately half for the first time in recent memory. Now, payments have been completely halted, at least temporarily.
During the earnings conference call, CEO Marc Bitzer spoke directly about the decision. “Our intention is to reinstate the dividend at the earliest opportunity, though ultimately this remains a board determination,” he explained. “We must first achieve sustainable improvement in our operating margins and make further progress on debt reduction.”
The stock had been struggling well before Thursday’s announcement. Prior to this session, WHR shares had declined 24% since the beginning of the year and 28% over the trailing twelve-month period. Looking at a five-year timeframe, the stock has plummeted more than 80%.
Tariff Whiplash Adds to the Pressure
Trade policy has created a complex challenge for the company. Whirlpool manufactures approximately 80% of its products on U.S. soil, which theoretically positions it favorably when import duties are elevated. However, the Supreme Court struck down the Liberation Day tariffs in February, removing protections that had helped the company maintain competitive pricing against international competitors. Following this reversal, foreign manufacturers reentered the market with more aggressive pricing.
Simultaneously, distinct Section 232 tariffs targeting steel and aluminum increased Whirlpool’s raw material expenses. This dual tariff impact—losing competitive advantages while facing escalating production costs—severely compressed profit margins.
In April, Section 232 tariffs were reconfigured to impose a uniform 25% duty on the complete value of appliances, rather than exclusively on the steel component. Bitzer indicated that this revised framework provides Whirlpool with a more transparent competitive advantage versus importers. Nevertheless, market participants remain skeptical about whether the benefit will materialize.
Citi analyst Kyle Menges observed that “industry demand declined to recession-level lows” throughout North America during the quarter, compounded by aggressive competitive pricing dynamics. He suggested that Whirlpool’s double-digit price adjustments “should be relatively defensible.”
Price Hikes and Factory Investment
The company has implemented price increases throughout its portfolio of washers, dryers, refrigerators, and cooking appliances this year, with additional increases scheduled for the summer months. Bitzer recognized that these adjustments will likely exceed competitor pricing actions, but defended them by highlighting new product innovations.
Earlier in the year, Whirlpool secured $1.1 billion through an equity offering. The move attracted criticism from investor David Tepper of Appaloosa Management, who characterized it as detrimental shareholder dilution and recommended the company evaluate strategic partnerships or potential acquisitions.
Last month, the company unveiled plans for a $60 million capital investment in a new manufacturing facility located in Perrysburg, Ohio, dedicated to producing washer and dryer components.
Management also identified declining consumer sentiment in the United States—which they partially attribute to elevated oil prices stemming from the Iran conflict—as a headwind impacting appliance demand throughout the quarter. Organic net sales contracted 6% year-over-year in the first quarter.
