Whirlpool, the Michigan-based maker of refrigerators, dishwashers, washing machines, and other home appliances announced on May 6 that it had cut its full-year earnings outlook nearly in half and would suspend its dividends to investors. For the first quarter, the company posted an ongoing loss of 56 cents per share, compared with positive earnings per share of $1.70 a year earlier.
Whirlpool started its quarterly earnings report with the statement: “War in Iran resulted in a recession-level industry decline in the U.S. as consumer confidence collapsed in late February and March.” Chief Financial Officer Roxanne Warner told the Wall Street Journal that consumer confidence is at historically low levels and “that consumers are being a bit more cautious in terms of what they’re spending, and most likely reducing the amount of big-ticket purchases.”
Whirlpool officials also put hopes on the spring housing market, historically the busiest selling season of the year. Before the Iran War, industry insiders said that the spring housing market had all the makings of a breakout season, with mortgage rates at a four-year low, inventory up, and 25 straight months of falling home prices. However, since the Iran War, mortgage rates have climbed back up, credit scores have declined, and inflation and volatility have “spooked” consumers. Whirlpool has absorbed higher costs from recent inflation, but intends to raise prices in July, and limit promotional discounts as a survival tactic.
