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



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.

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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.

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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.


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.


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