Whirlpool Corp. said Monday that its first-quarter profit more than doubled as sales of its appliances improved both domestically and overseas.
Shares soared as the company also boosted its guidance. The strong quarter offers a strong indication that consumers are feeling comfortable enough economically to buy more big-ticket items.
The world's largest appliance maker lifted its 2010 earnings forecast above Wall Street's expectations on its quarterly performance.
Its stock gained $14.40, or 14 percent, to $116.62 Monday morning, after earlier setting a new 52-week high of $118.44. The shares have traded as low as $37.24 over the past year.
Whirlpool, which sells Maytag, KitchenAid, Jenn-Air and its namesake brand, did not say whether a federal rebate program to boost sales of energy efficient products helped sales but analysts largely expect it did.
Last year's stimulus bill funded a $300 million program that will offer rebates of varying amounts -- possibly up to $200 or more - to buyers of energy-efficient appliances and other products that carry the "Energy Star" label.
In the depths of the recession, shoppers pulled back sharply on purchases of big-ticket items such as washers and dryers, which hurt Whirlpool's profit. But that spending has been increasing as economic conditions improve and shoppers flock to the rebates, which are being doled out by states.
People have been hungry for them, often using up allotted amounts in just days. Massachusetts decided to offer a second round of appliance rebates this summer after program hopefuls used up allotted funding in just hours. Texas' funding was used up within a day.
In the first three months of the year, Whirlpool earned $164 million, or $2.13 per share, well above the $68 million, or 91 cents per share, the company earned a year ago.
Forecasters Optimistic About Economy, Jobs
Economists are more optimistic about prospects for growth this year as industries increasingly report better profits and add new jobs, though they still expect the recovery to remain slow, a new survey shows.
Seventy percent of those recently surveyed by The National Association for Business Economics believe real GDP will grow by more than 2 percent this year, up from 61 percent who said the same in January. Twenty-four percent are predicting real GDP will grow by more than 3 percent in 2010, up from 14 percent earlier this year.
"Industry demand moved higher compared to results in the January 2010 report, pointing to stronger growth in 2010," said William Strauss, a senior economist at the Federal Reserve Bank of Chicago. "After more than two years of job losses, job creation increased in the first quarter of 2010, suggesting a better outlook for hiring over the next six months."
The NABE forecast, set to be released Monday, shows fewer jobs are being shed, more are being created and more companies are making money.
The findings echoed results issued by Conference Board last week for its index of leading economic indicators. The figure jumped 1.4 percent in March, suggesting economic growth is likely to continue for the next three to six months. The growth was at its fastest pace in 10 months. Government data also showed that employers in March added 162,000 jobs, the most in three years.
The survey of 68 NABE members from private sector and industry trade associations takes into account first-quarter results and near-term outlook and was taken March 25 through April 10.
No Deal Yet On Financial Rules As Test Vote Looms
With no bipartisan deal on how to rein in Wall Street, Democrats stepped up their efforts Sunday to splinter unified Republican opposition to their sweeping regulatory overhaul.
In a move that could attract the support of at least two Republicans, Democratic Sen. Christopher Dodd, the chairman of the Senate Banking Committee, agreed to toughen his sweeping bill with rules on derivatives despite objections from the Obama administration, according to a Democratic official familiar with the negotiations.
Derivatives are the complex securities blamed for helping precipitate the 2008 Wall Street crisis.
The restrictions adopted by Dodd were written and approved by the Senate Agriculture Committee last week. They include a requirement that banks spin off their derivatives businesses into subsidiaries with separate sources of capital. Banks fiercely opposed the provision. The Obama administration has called for banks to end trading in speculative securities, but not to jettison operations that create derivatives markets for clients.
The Agriculture Committee language had the support of Republican Sens. Charles Grassley of Iowa and Olympia Snowe of Maine. It was sponsored by committee chairwoman Blanche Lincoln, D-Ark., who pressed Dodd to incorporate it into the broader bill.
It was unclear Sunday night whether adding the derivatives restrictions would be enough for Snowe and Grassley to join Democrats and vote to permit the start of debate on the larger Wall Street bill.
Reuters; Federal Reserve; AP; The National Association for Business Economics; Wall Street Journal; Bloomberg.
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