Whirlpool to Miss Forecasts for Rest of Year

BENTON HARBOR, Mich. —  Whirlpool Corp., the No. 1 U.S. maker of large appliances, said its earnings will miss forecasts for the rest of the year, largely because Circuit City Group will no longer sell its products.

Whirlpool said its third-quarter earnings will be cut by as much as 55 cents a share by Circuit City’s recent decision to stop selling major appliances, bringing results well below analysts’ forecasts.

Whirlpool also has been hurt by rising competition in the U.S. from General Electric Co., whose appliances are sold by Home Depot Inc. and will be available at Wal-Mart Stores Inc. later this year.

Shares of the maker of Whirlpool, KitchenAid, Roper and Estate appliances fell 13 cents to close at $37.75 on the New York Stock Exchange. The stock has tumbled 48% in the last year.

“The issue now is how badly the distribution network is damaged,” said portfolio manager Adam Friedman of National City Corp.’s Armada Funds. National City owns 292,090 Whirlpool shares. “Our people are scared to death that Home Depot and Wal-Mart are the 800-pound gorillas in the industry, and if you’re not with them you’re going to be in a lot of trouble.”

Profit in the last half also would be hurt by pricing pressures in its North American and European markets, rising material costs and the dollar’s strength in Europe, Whirlpool said.

For the full year, Whirlpool said it now expects profit of $5.58 to $5.78 a share, compared with $5.35 in the previous year. The average estimate of analysts polled by First Call/Thomson Financial is $6.35.

The company expects third-quarter earnings of 95 cents to $1.05 a share, compared with the $1.52 analysts expected and down from the $1.40 earned in the year-earlier quarter.

Fourth-quarter profit should reach $1.45 to $1.55, compared with $1.51 a year ago, missing forecasts of $1.68, it said.

Whirlpool said it expects to lose between 90 and 120 days of previously planned shipments to Circuit City as the retailer liquidates its inventories and other appliance retailers pick up consumer demand. Circuit City said in July that it will stop selling major appliances to focus on consumer electronics and home-office products.

Whirlpool expects to replace the lost Circuit City business with other chains, including Best Buy Co., Lowe’s Cos. and other large regional retailers, the company said on a conference call. Best Buy has agreed to add more Whirlpool products, Whirlpool spokesman Christopher Wyse said.