Whirlpool Corp., the world’s largest appliance maker, reported a 9.2 percent drop in third-quarter profit as American and European consumers shied away from major household purchases.
The shares fell the most in five months after the Benton Harbor, Michigan-based company said today that net income fell to $79 million, or $1.02 a share. Excluding some items, profit was $2.22, compared with the $2.23 average of estimates compiled by Bloomberg.
Sales in the quarter increased 0.5 percent to $4.52 billion, with growth slowing from 14 percent in the first half. Whirlpool, led by Chief Executive Officer Jeff Fettig, said in 2008 it would fire 5,000 workers through 2010 to reduce costs as the U.S. housing slowdown and rising unemployment hurt demand for refrigerators and dishwashers.
“Consumers are pursuing more value-oriented purchases,” David MacGregor, an Independence, Ohio-based analyst with Longbow Research, said in a phone interview. “That doesn’t bode well for profitability when consumers are going down-market.” MacGregor rates the shares as “neutral.”
Whirlpool, the maker of Maytag washing machines and KitchenAid refrigerators, fell $4.15, or 4.9 percent, to $80.37 at 9:44 a.m. in New York Stock Exchange composite trading. Earlier they dropped as low as $77.81, the biggest decline since May.
Revenue in North America fell 3 percent to $2.4 billion in the quarter, while sales in Europe shrank 8 percent to $827 million. Revenue rose 13 percent to $1.1 billion in Latin America and increased 21 percent to $195 million in Asia.
“As expected, we faced a challenging environment during the quarter which resulted in a significant slowing in sales growth,” Fettig said in a statement.
A year earlier, third-quarter profit was $87 million, or $1.15 a share.
To contact the editor responsible for this story: Robin Ajello at Rajello@bloomberg.net