Shares of Whirlpool Corporation (WHR) hit a new 52-week high of $122.80 on Tuesday, May 7, driven by the company’s robust bottom-line results for the first quarter of 2013. This Zacks Rank #2 (Buy) company eventually closed at $122.65, representing a healthy return of approximately 21.1% from the closing price of $101.29 on Dec 31, 2012. Average volume of shares traded over the last 3 months stands at approximately 1,174,950.
An impressive record of beating the quarterly earnings expectations, a positive fiscal 2013 outlook and a decent dividend yield enabled the shares of Whirlpool to reach the new high.
With respect to earnings surprise, Whirlpool has beaten the Zacks Consensus Estimate thrice in the trailing 4 quarters, topping it by 1.0% in the first quarter of 2013. The average positive surprise in the trailing 4 quarters comes to 2.8%.
On Apr 24, Whirlpool reported outstanding bottom-line results for the first quarter of 2013. Adjusted quarterly earnings of $1.97 per share were higher than the year-ago quarter number of $1.41, and surpassed the Zacks Consensus Estimate of $1.95. The robust bottom-line performance was attributable to the company’s sustained focus on cost and capacity reduction initiatives, along with better price and product mix.
Buoyed by better-than-expected bottom-line results, Whirlpool reiterated its adjusted earnings guidance range of $9.25–9.75 per share in 2013, up 31–38% from 2012. Currently, the Zacks Consensus Estimate for 2013 is $9.72 per share, which nudged up nearly 1.3% in the last 30 days.
Alongside its strong first-quarter results, Whirlpool’s growth prospects look promising. We believe that the company’s sustained focus on developing new products along with cost-reduction initiatives and diversification of business across the world, to eliminate the geographical risks arising from concentration in one region, bodes well for future growth.
Over the last 101 years, Whirlpool has emerged as the leading manufacturer and supplier of major home appliances. It is considered to be the largest home-appliances manufacturer in the world, ahead of Electrolux AB, LG, Samsung, General Electric Co. (GE) and Haier Electronics Group. Moreover, the company is placed among the leading home appliances makers in India and Europe.
Whirlpool is also known for its shareholder-friendly moves. Since 1983, the company has increased its dividend from 22.5 cents to 62.5 cents. This currently yields a solid 2.0%, with a payout ratio of 28.0%. We believe that its consistent dividend payments and increments reflect the growth potential of its earnings and its cash flow generation capabilities.
Simultaneously, companies such as Nordstrom Inc. (JWN) and V.F. Corporation (VFC) achieved new 52-week highs of $58.66 and $180.01, respectively, on Tuesday, May 7.
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