Drees Homes Extends Its Agreement with Whirlpool



Price movement

Whirlpool (WHR) fell 0.01% to close at $162.16 per share during the fourth week of September 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.01%, -9.2%, and 12.3%, respectively, on September 30.

WHR is trading 3.0% below its 20-day moving average, 8.9% below its 50-day moving average, and 1.9% below its 200-day moving average.

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Related ETFs and peers

The First Trust Large Cap Value AlphaDex ETF (FTA) invests 0.34% of its holdings in Whirlpool. The ETF tracks an index that selects and weights value stocks from the S&P 500 Value Index using fundamental factors such as sales, book value, and cash flows. The YTD price movement of FTA was 10.8% on September 30.

The SPDR S&P 500 ETF (SPY) invests 0.07% 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 caps of Whirlpool’s competitors are as follows:

  • Spectrum Brands Holdings (SPB) — $8.1 billion
  • Sears Holdings (SHLD) — $1.2 billion

Latest news on Whirlpool

In a press release on September 29, 2016, Whirlpool reported, “Drees Homes, a builder with a storied 85-plus year history, has signed a contract with Whirlpool Corporation that continues an exclusive relationship of more than 30 years with the world’s leading major appliance manufacturer.”

It added, “Drees features Whirlpool®, KitchenAid® and Jenn-Air® brand appliances in its homes as part of its agreement with Whirlpool Corporation, which now extends through 2019.”

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Performance of Whirlpool in 2Q16

Whirlpool reported 2Q16 net sales of $5.20 billion, a fall of 0.19% from its net sales of $5.21 billion in 2Q15. The company’s gross margin and operating profit rose 7.2% and 34.1%, respectively, between 2Q15 and 2Q16.

Its net income and EPS (earnings per share) rose to $320.0 million and $4.15, respectively, in 2Q16, compared to $177.0 million and $2.21, respectively, in 2Q15.

Whirlpool’s cash and cash equivalents and inventories rose 24.2% and 22.3%, respectively, between 4Q15 and 2Q16. Its current ratio rose to 0.98x, and its long-term debt-to-equity ratio fell to 0.96x in 2Q16, compared to 0.95x and 0.99x, respectively, in 4Q15.


Whirlpool has made the following projections for 2016:

  • EPS in the range of $11.50–$12
  • ongoing business EPS in the range of $14.25–$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
  • cash from operating activities in the range of $1.4 billion–$1.6 billion
  • industry unit shipments to rise 5%–6% in the United States, to be flat to 2% in Europe, the Middle East, and Africa, to fall 10% in Brazil, and to be flat in Asia

Next, we’ll discuss General Mills (GIS).


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