Stock Buy: Whirlpool Corporation

Whirlpool Corporation (WHR: 82.08 0.00 0.00%) recently reported fourth quarter sales growth of 12.72% as the emerging markets in Latin America and Asia boosted the bottom line. It was Whirlpool’s fourth big beat in a row.

Company Description

Whirlpool manufactures home appliances, such as refrigerators, dishwashers, cooking and countertop appliances. The company owns many iconic brands such as Maytag, KitchenAid, Jenn-Air, Amana, Bauknecht and Consul.

Whirlpool has 67 manufacturing and technology research centers worldwide.

Whirlpool Surprised By 26.15% in the Fourth Quarter

If you’ve been reading our Rank Buy profiles on Whirlpool both on the Value and Momentum side of the equation the past month, you were not surprised by Whirlpool’s outstanding earnings report on Feb 2.

Just as the third quarter alluded to the growth potential in the emerging markets, as emerging market sales offset some of the decline in the North American and European markets, so the fourth quarter has now confirmed that Whirlpool’s strategy is on track.

Latin American sales jumped 52% to $1.2 billion. Excluding currency translation, sales rose about 28%.

Brazil has been the hot market due to the expanding middle class and home ownership that is being pushed by several government incentive programs. Whirlpool expects Brazilian appliance shipments to rise 5% to 10% in 2010 compared with 2009.

Asian sales also jumped 34% but Asia is Whirlpool’s smallest segment. Sales were just $188 million for the quarter. Whirlpool is forecasting growth of 3% to 5% in unit shipments for 2010.

But even the North American and European markets, which had been a drag on results, saw sales growth. North American sales were up 4% and Europe rose 2% over the year ago quarter.

Outlook for 2010

Whirlpool is optimistic about 2010. The company issued earnings per share guidance of between $6.50 and $7.00 which is much higher than the current Zacks Consensus Estimate of $6.36 per share.

Look for covering analysts to revise their estimates in the next few days.

Value Fundamentals

Whirlpool continues to exhibit strong value fundamentals. The #1 Rank (strong buy) stock has a forward P/E of just 11.96 and a price-to-book ratio of 1.53. Whirlpool’s 5-year average return on equity (ROE) is also an outstanding 17.18%.