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Here's Why Whirlpool (WHR) is Poised to Beat on Q1 Earnings

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Zacks Equity Research
·4-min read
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Whirlpool Corporation WHR is slated to release first-quarter 2021 results on Apr 21, 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 first-quarter earnings stands at $5.04, indicating 78.7% growth from the year-ago quarter’s reported figure. The consensus mark has increased 0.8% in the past 30 days.

For first-quarter revenues, the consensus mark is pegged at $4.77 billion, suggesting 10.2% growth from the prior-year quarter’s reported figure.

Notably, the company delivered an earnings surprise of 3.9% in the last reported quarter. Moreover, the bottom line beat estimates by 67.8%, 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 benefiting from the execution of its go-to-market strategies and cost-takeout endeavors. Gains from cost-saving endeavors, which include curtailing structural and discretionary costs, capturing raw material deflation opportunities, effectively managing working capital, and syncing supply chain and labor levels with demand, are likely to have aided margins in the first quarter.

Moreover, the enhancement of e-commerce and direct-to-consumer capabilities is expected to have aided sales in the to-be-reported quarter.

On the last reported quarter’s earnings call, management noted that signs of recovery such as improved demand and positive housing trends position the company for growth in the first quarter. It predicted the demand for household appliances to remain strong, driven by rising disposable income, increased investments in home space and a favorable housing shift.

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 first quarter.

Moreover, raw-material inflation, particularly led by higher steel and resin costs, is likely to have weighed on margins in the first quarter. Also, the company’s heavy investment in innovative products and technology is expected to strain the results.

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 #2 and an Earnings ESP of +1.39%.

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:

Rocky Brands, Inc. RCKY has an Earnings ESP of +5.09% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Snap-On Incorporated SNA has an Earnings ESP of +5.00% and it currently has a Zacks Rank #2.

Ralph Lauren Corporation RL has an Earnings ESP of +31.32% and it presently carries a Zacks Rank #2.

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