Yahoo Finance Whirlpool (WHR) Widens Manufacturing Operations in Argentina
Whirlpool Corporation WHR has recently concluded the two-year expansion of its manufacturing unit in La Tablada city in Buenos Aires Province, Argentina. This facility is likely to manufacture front load washing machines with Sense Inverter technology.
The latest expansion is in sync with the more than $20 million investment plan initiated last year, following commencement of manufacturing at the facility. With this expansion, the company has successfully introduced its global platform and innovations to the Argentina market, which is among its key business centers.
Further, this calls for the addition of Argentina to Whirlpool’s roster of facilities that already include 70 manufacturing and technology research units across the globe. Not only this, the new facility is expected to add about 100 new and 300 indirect jobs in the region.
Additionally, we expect this facility to enhance the sales of the company’s Latin America region. Notably, the Latin America segment contributed 15.7% to net sales in third-quarter 2017, reflecting a sales growth of 6.1% year over year. Though the region is performing well, its operating margin growth was somewhat hurt by raw material inflation and adverse product price/mix in the quarter.
Notably, Whirlpool is among the few companies that heavily invest in technologies to produce differentiated products to suit the needs of their end consumers. Therefore, we believe the latest manufacturing facility strategically fits the company’s practice of providing innovative products to consumers, thereby helping them to develop the home ecosystem.
However, this Zacks Rank #4 (Sell) company’s shares have lost 8.9% in the past six months, narrower than the industry’s plunge of 20.9%. Much of the stock’s decline can be attributed to Whirlpool’s dismal surprise history. While the bottom line delivered fifth consecutive negative earnings surprise in the third quarter, sales marked its second straight miss.
Nevertheless, we remain optimistic about the company’s 2020 goals, ongoing growth initiatives, global cost-based pricing and fixed cost reduction strategies, which are likely to drive growth and make Whirlpool investors’ favorite.
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