Whirlpool Corp, the world's largest appliance maker, missed Wall Street's expectations for quarterly earnings and sales, hurt by weak demand in Europe and a stronger dollar.
The news on July 24 pushed shares of the maker of Maytag and KitchenAid appliances down more than 7 percent and raised concerns about sales in the key European market for the rest of the year. Investors should brace themselves for a long period of weakness in Europe, said Brian Sozzi, chief equities analyst of NBG Productions.
"It has gotten worse," Sozzi said. "There is no reason for me to think that it is going to improve any time soon."
Home appliance makers have struggled with higher raw materials costs and tepid demand in developed markets, especially in Europe, which is reeling from an economic crisis. European shoppers have cut back spending on discretionary items such as refrigerators and freezers.
Whirlpool's second-quarter sales fell 4.6 percent to $4.51 billion, missing the analysts' average estimate of $4.63 billion, according to Thomson Reuters I/B/E/S.
Sales at the company's Europe, Middle East and Africa unit fell to $692 million from $841 million a year earlier. Excluding currency translations, sales declined about 7 percent, as did unit shipments for the region.
Whirlpool said it still expected shipments to Europe, the Middle East and Africa to fall 2 percent to 5 percent for 2012. Weak consumer demand across the euro zone forced the company to cut back production in the region, it said.