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Things You Must Note Ahead of Whirlpool's (WHR) Q4 Earnings

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Zacks Equity Research
·3 min read
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Whirlpool Corporation WHR is slated to release fourth-quarter 2020 results on Jan 27, after the closing bell. This household appliances company is likely to have witnessed revenue and earnings growth in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s fourth-quarter earnings stands at $6.01, indicating 22.4% growth from the year-ago quarter’s reported figure. The consensus mark has increased 1.2% in the past seven days.

For fourth-quarter revenues, the consensus mark is pegged at $5.58 billion, suggesting 3.6% growth from the prior-year quarter’s reported figure.

Notably, the company delivered an earnings surprise of 68.5% in the last reported quarter. Moreover, the bottom line beat estimates by 70.3%, on average, over the trailing four quarters.

Whirlpool Corporation Price and EPS Surprise

 

Whirlpool Corporation Price and EPS Surprise
Whirlpool Corporation Price and EPS Surprise

Whirlpool Corporation price-eps-surprise | Whirlpool Corporation Quote

Key Points to Note

Whirlpool has been benefiting from the spike in demand for kitchen and home appliances as consumers continue to invest in home upgrades with increased stay-at-home practices. Additionally, the company has been gaining from the high demand for its HEPA Air Purifiers that are capable of removing 99.97% of particles from the air.

Further, its digital transformation efforts through the enhancement of e-commerce and direct-to-consumer capabilities, as consumers adopt online shopping for purchasing electronics, bode well. The aforementioned trends as well as continued online sales growth are likely to have contributed meaningfully to the fourth-quarter performance.

Additionally, exceptional execution of go-to-market and cost takeout endeavors has been aiding the company’s bottom line. It is likely to have generated more than $500 million of net cost takeout through its COVID-19 response plan in 2020, gains from which should get reflected in earnings for the fourth quarter.

However, the company’s Asia business has been witnessing soft demand, particularly in China, which is likely to have weighed on EBIT margins. This is likely to have partly hurt the bottom line in the fourth quarter.

What the Zacks Model Says

Our proven model predicts an earnings beat for Whirlpool this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Whirlpool has a Zacks Rank #3 and an Earnings ESP of +4.76%.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:

Mattel, Inc. MAT has an Earnings ESP of +25.00% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steven Madden, Ltd. SHOO has an Earnings ESP of +1.61% and it currently flaunts a Zacks Rank #1.

Vista Outdoor Inc. VSTO has an Earnings ESP of +1.05% and it presently sports a Zacks Rank #1.

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Mattel, Inc. (MAT) : Free Stock Analysis Report
 
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