"...we estimate that our material cost base will increase an additional 7-to-8 percent during 2005. To address this challenging environment, we have implemented global price increases of approximately 5-to-10 percent, effective January 2005"
Jeff M. Fettig, Whirlpool's chairman, president and chief executive officer

Whirlpool Corporation (WHR) today announced fourth-quarter 2004 net earnings of $97 million, or $1.44 per diluted share, compared to $124 million, or $1.76 per diluted share, in the same period last year.

Record net sales for the fourth quarter of $3.63 billion increased 8.1 percent from last year's results. Excluding currency translations, net sales increased approximately 5 percent.

"Overall global industry volume remained robust during the quarter as we continued to experience strong consumer demand for our brands and innovation," said Jeff M. Fettig, Whirlpool's chairman, president and chief executive officer. "Net earnings per diluted share in the fourth quarter were significantly affected by increases in material and logistics costs, which increased by approximately $150 million above the prior-year quarter. This downward pressure on the company's operating margins was mitigated by higher volume, record levels of productivity, price increases, lower incentive compensation expense, and cost controls."

The company's earnings also reflect a reduction in the company's effective tax rate and gain on an equity investment.

For 2004, the company's net sales increased 8.6 percent to a record $13.22 billion.

Fettig added: "During the fourth quarter we announced that we were taking specific actions to offset unprecedented levels of material and oil related cost increases. As predicted, these increases accelerated during the quarter, and we estimate that our material cost base will increase an additional 7-to-8 percent during 2005. To address this challenging environment, we have implemented global price increases of approximately 5-to-10 percent, effective January 2005, in most key markets around the world. We also have initiated actions to drive record levels of controllable productivity, to leverage our global operating platform and to reduce non-product investment related spending. In addition, we are accelerating our rate of innovation to the market and plan to introduce a large number of new products from our innovation pipeline throughout the year.

"We believe these actions, combined with our plans to build differentiated levels of customer loyalty for our brands, will enable us to successfully manage through this period of rising commodity costs. The full effect of these cost increases will be reflected in our cost structure from the start of 2005, while the benefits of both price increases and productivity improvements will build throughout the year. For the full year, we expect earnings per share to be between $5.90-$6.10 per diluted share and free cash flow to be in the $250-$300 million range."