uploads/2016/05/whr-pm.png

How Did Moody’s Rate Whirlpool’s Senior Unsecured Notes?

By

Updated

Whirlpool’s price movement

Whirlpool (WHR) has a market capitalization of $12.9 billion. It fell by 1.1% to close at $166.98 per share on May 18, 2016.

The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -2.6%, -11.7%, and 15.1%, respectively, as of the same date. This means that WHR is trading 5.7% below its 20-day moving average, 5.8% below its 50-day moving average, and 5.1% above its 200-day moving average.

Article continues below advertisement

Related ETFs and peers

The Vanguard Mid-Cap ETF (VO) invests 0.42% of its holdings in Whirlpool. The ETF tracks the CRSP US Mid-Cap Index, a diversified index of US mid-cap companies. The YTD price movement of VO was 0.10% as of May 18, 2016.

The SPDR S&P 500 ETF (SPY) invests 0.08% of its holdings in Whirlpool. The ETF tracks a market-cap–weighted index of US large- and mid-cap stocks selected by the S&P Committee.

The market capitalizations of Whirlpool’s competitors are as follows:

  • Spectrum Brands Holdings (SPB) — $6.9 billion
  • Sears Holdings (SHLD) — $1.2 billion

Moody’s rated Whirlpool notes

Moody’s Investors Service rated Whirlpool’s $500 million senior unsecured notes due 2046 as “Baa1.” The net proceeds from these notes will be used to refinance existing debt and pay related fees and expenses.

Article continues below advertisement

Performance of Whirlpool in 1Q16

Whirlpool (WHR) reported 1Q16 net sales of $4.6 billion, a fall of 4.7% compared to its net sales of $4.8 billion in 1Q15. The company’s gross margin and operating profit fell by 3.8% and 6.6%, respectively, in 1Q16 compared to 1Q15.

Whirlpool’s net income and EPS (earnings per share) fell to $150.0 million and $1.92, respectively, in 1Q16, compared to $191.0 million and $2.38, respectively, in 1Q15.

Whirlpool’s cash and cash equivalents fell by 9.5%, and its inventories rose by 18.2% in 1Q16 compared to 4Q15. Its current ratio and long-term debt-to-equity ratio fell to 0.91x and 0.93x, respectively, in 1Q16, compared to 0.95x and 0.99x, respectively, in 4Q15.

The company announced a share repurchase program of $1 billion and an 11% rise in dividends. During 1Q16, it repurchased $225 million worth of shares.

Projections

Whirlpool has made the following projections for 2016:

  • EPS in the range of $11.25–$12.00
  • ongoing business EPS in the range of $14.00–$14.75
  • free cash flow in the range of $700 million–$800 million, including restructuring cash outlays of up to $200 million, legacy product warranty and liability costs of $155 million, and capital spending of $700 million–$750 million
  • industry unit shipments to fall by 10% in Brazil, rise by 5%–6% in North America, and stay flat up to 2% in EMEA (Europe, the Middle East, and Africa)

Now, let’s take a look at Packaging Corporation of America.

Advertisement

More From Market Realist