IB Net Payout Yields Model

Whirlpool Results Hammer Sears Holdings

Sears Holdings (SHLD) is down 5% today after disappointing results from appliance maker Whirlpool (WHR). Maybe logical if investing in Sears a decade ago, but the current ramp in the stock price has more to do with the potential leasing of unused retail space and the externalizing of brands.

SHLD had been on a huge run since bottoming below $52 in late September so a pause at $82.50 isn't that shocking. It just took a little negative news for traders to jump ship. Nothing that alarming since SHLD should not be owned based on whether Kenmore appliances are selling well.

SHLD will likely see some follow through weakness next week. The key will be holding the 10ema around $75.30.


Details from WHR press release:

  • Third-Quarter Consolidated Revenue up 2% 
  • EPS of $2.27 Versus $1.02 in Prior-Year Period 
  • Company Announces Major Cost Reduction Initiatives to Support Margin Expansion and Strengthen Global Competitive Position 
  • "During the quarter, we experienced weaker than expected global industry demand and elevated material costs," said Jeff M. Fettig, Whirlpool Corporation chairman and chief executive officer.  "Consumers continue to show strong preference for our unmatched global brand portfolio and new product innovations, and we are beginning to see the benefits from previously announced price increases.  However, our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs.  
  • The world’s largest maker of appliances, sank the most since 2008 after saying it will cut 5,000 jobs and lowering an annual profit forecast by as much as 36 percent with demand in the U.S. falling back to recessionary levels.
  • The plan, which also includes reducing factory capacity by 6 million units, will cost $500 million, Whirlpool said in a statement today. Profit this year will be in a range of $4.75 to $5.25 a share, down from a previous forecast of $7.25 to $8.25, the company said. 
  • Demand declined as U.S. consumer confidence fell, the sovereign debt crisis accelerated in Europe and inflation slowed growth in emerging markets, Chief Executive Officer Jeff M. Fettig said today in a conference call with analysts. 


Disclosure: Long SHLD. Please review the disclaimer page for more details. 


Comments

Popular posts from this blog

Aurora Cannabis: Deal Or No Deal

C3.ai: Out Of Steam (Rating Downgrade)

Archer Aviation: Promising Developments