"Demand has been strong in all markets, but rising material costs, material availability and transportation constraints have made this a challenging operating environment"
Jeff Fettig, Whirlpool's chairman, president and chief executive officer

Whirlpool Corporation today announced second-quarter financial results, highlighted by record second-quarter revenue and a 13-percent increase in earnings per share.

Second-quarter net sales of $3.26 billion increased 9.2 percent from the same period last year.

"Our second-quarter results reflect the continuing strong momentum in our North American and European businesses, and improving conditions in Latin America," said Jeff Fettig, Whirlpool's chairman, president and chief executive officer. "Demand has been strong in all markets, but rising material costs, material availability and transportation constraints have made this a challenging operating environment. Our global operations effectively managed these issues during the quarter, which led to our strong performance."

For the first half of 2004, sales of $6.27 billion increased 9.9 percent from the prior-year period. Excluding currency translations, year-to-date sales increased approximately 7 percent.

Second-Quarter Highlights

* Sales and unit shipments were second-quarter records for the company. Net earnings of $1.53 per diluted share increased 13 percent from the prior- year period.

* Free cash flow improved $125 million compared to the prior-year period (see reconciliation table below).

* Whirlpool Corporation's Board of Directors authorized a new share repurchase program of up to $500 million.

* The company announced plans to invest approximately $180 million in its North America operations for the continued development and introduction of innovative products. Approximately $100 million of the investment will fund initiatives at seven manufacturing facilities in the United States. Approximately $80 million will fund activities in Mexico to expand the company's washer production facility in Monterrey and construct a new refrigeration facility in Ramos Arizpe.

Second-Quarter Region Review

Whirlpool North America's sales of $2.1 billion increased 6.9 percent from the prior-year period. Sales and unit shipments reached record levels for the region, and operating profit was a second-quarter record. The results reflected strong industry growth and consumer demand for the company's brands and new product introductions.

Operating profit, which included the negative impact of currency, higher logistics costs and higher costs for raw materials, increased 6.9 percent from the prior-year period. Effective brand and product mix management and continued strong levels of manufacturing productivity contributed to the profit improvement.

U.S. industry unit shipments of major appliances (T7) increased 9.3 percent from the prior-year period. Based on current economic conditions, the company now expects full-year U.S. industry shipments to increase 5-to-6 percent from last year's level.

Whirlpool Europe's sales of $704 million increased 12.1 percent from the prior-year period. Excluding currency translations, sales increased approximately 6 percent. Within a mixed economic environment where appliance demand improved moderately, Whirlpool Europe outperformed the industry with record sales and unit shipments, and enhanced the Whirlpool brand's market leading position.

Operating profit increased 52 percent, driven in part by the growing demand for the company's innovative products, including new built-in kitchen appliances and side-by-side refrigerators. Record levels of productivity also contributed to the profit improvement. During the quarter, the company announced a region-wide price increase in response to rising raw material costs.

Second-quarter industry unit shipments increased 3 percent from the prior- year period. Based on current economic conditions, the company expects full- year industry shipments to increase approximately 2-to-3 percent.

Whirlpool Latin America's sales of $392 million increased 23 percent from the prior-year period. Excluding currency translations, sales increased approximately 24 percent.

Economic conditions continued to improve during the quarter as interest rates remained stable and unemployment declined. Renewed consumer spending led to a significant increase in appliance demand compared to the prior-year period. The company's shipments outpaced regional industry growth during the quarter, and exports continued to expand compared to the prior-year period.

Operating profit improved 8.4 percent on gains from price increases and robust shipments of the company's major appliances, both domestic and exports. The improvement was partially offset by significant increases in raw material costs.

Second-quarter industry unit shipments in Brazil increased approximately 28 percent from the prior-year period. Based on current economic conditions, the company expects full-year industry unit shipments to increase approximately 12-to-15 percent from last year's level.

Whirlpool Asia's sales of $110 million declined 6.4 percent from the prior-year period. Excluding currency translations, sales declined approximately 12 percent in a challenging industry environment. Earnings were impacted by significant industry pricing pressures and increases in raw materials costs. During the quarter, Whirlpool Asia continued to ramp up its capabilities as a source of procurement, technology and exports for the company's other global operations.

Based on current economic conditions, the company continues to expect full-year industry unit shipments to increase by 5-to-7 percent.

Outlook

"We continue to expect to deliver a record year of revenues and full-year earnings in the range of $6.20 to $6.35 per share for 2004," said Fettig. "The expected performance is based on the strong demand for our global innovative products and brands, and our second-half outlook for key markets around the world. The guidance incorporates the external challenges of raw material costs, material supply availability and transportation constraints, as well as the planned investments in the company's global operating platform. Our operations are positioned to successfully manage these issues and deliver a record year of performance."