What Happened?
Shares of home appliances manufacturer Whirlpool (NYSE:WHR) fell 12.6% in the afternoon session after the company reported disappointing second-quarter earnings, significantly cut its dividend, and lowered its full-year financial forecast.
The company's second-quarter earnings per share of $1.34 missed analyst expectations, and net sales fell 5.4% year-over-year to $3.77 billion. Management pointed to declining global demand, increased promotions, and competitors stockpiling imports ahead of U.S. tariffs as key pressures on the results. In response to the challenging environment, Whirlpool reduced its full-year earnings guidance to a range of $6.00 to $8.00 per share, a significant drop from its previous forecast of around $10.00. The company also announced a major cut to its annual dividend, lowering it to $3.60 per share. Following the news, Bank of America downgraded the stock to "underperform" and reduced its price target to $70.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Whirlpool? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Whirlpool’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Whirlpool and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 19.6% on the news that the company reported underwhelming fourth quarter results. Its revenue missed, and its full-year adjusted EPS guidance missed significantly. Top-line growth was weakened by the recent sale of its European business amid efforts to improve its cost structure. Overall, this was a weaker quarter.
Whirlpool is down 26.3% since the beginning of the year, and at $84.84 per share, it is trading 36.3% below its 52-week high of $133.14 from January 2025. Investors who bought $1,000 worth of Whirlpool’s shares 5 years ago would now be looking at an investment worth $521.87.
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