said it lost $371 million in the second quarter stemming from the appliance maker’s exit from its business in Russia and cut its profit outlook for the year.
Whirlpool is one of hundreds of companies from the US and other Western countries that said this spring that they would stop doing business in Russia altogether or curtail operations following Russia’s invasion of Ukraine in late February. Others leaving Russia or planning to include McDonald’s Corp., Nike Inc. Cisco Systems Inc. and retailer Hennes & Mauritz AB.
Companies have found a limited pool of suitable buyers though and are facing depressed values for factories and stores that have been cut off from the rest of the world by sanctions against Russia.
The Benton Harbor, Mich.-based Whirlpool late last month said it agreed to sell its plant in Lipetsk, Russia, and its sales operations in Moscow, Kazakhstan and other nearby countries to Arçelik AS..
for €220 million, or about $225 million.
“The environment there made it necessary to do something very quickly and find an owner who could continue to run that business,” Chief Financial Officer Jim Peters said Monday.
Whirlpool said Arçelik will pay for the acquisition in installment payments over 10 years based on business conditions and Arçelik’s financial condition. Whirlpool on Monday recorded a $747 million charge in the second quarter related to the sale
The Lipetsk plant had been a major producer of appliances for Whirlpool’s Indesit and Hotpoint brands in Europe. The company said the war in Ukraine hurt appliance demand from Europe, the Middle East and Africa. Quarterly sales from the region decreased 19.4% from the same period last year to $1 billion, as profit shrank by 93.5% to $2 million.
Lower sales volumes of appliances and higher costs for materials weighed on Whirlpool’s results in other regional markets. In North America, the company’s largest market, sales slipped 2.6% as profit from the region fell 25%.
Whirlpool has said it struggled with unreliable supplies of components during the quarter. The company said it temporarily idled production at its clothes dryer plant in Ohio in late May and early June because of supply-chain disruptions.
Whirlpool said it now expects full-year profit to be in a range of $9.50 a share to $11.50 a share, down from $24 to $26 a share forecast in April.
Whirlpool’s overall sales from the quarter ended June 30 slipped 4.3% to $5.1 billion. Excluding the charges, the company said it earned $5.97 a share, topping analysts’ expectation for $5.27 a share on sales of $5.2 billion.
Whirlpool’s shares were up about 1.5% in after hours trading at $167.37.
–Nina Trentmann contributed to this article.
Write to Bob Tita at email@example.com
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Appeared in the July 26, 2022, print edition as ‘Whirlpool Posts Loss Spurred by Russia Exit.’