Washing machines, refrigerators and other appliances are likely to remain hard to get this year as Covid-19 infections continue to fuel supply chain problems, Whirlpool Corp.’s WHR -0.22% chief executive said Wednesday.
The company, based in Benton Harbor, Mich., has increased production to meet higher demand but the Omicron variant has extended staffing challenges and order backlogs, said Whirlpool CEO Marc Bitzer.
“It was labor shortages, component shortages,” Mr. Bitzer said, referring to issues that influenced meeting demand in 2021. “Now with Omicron and all the ripple effects, there is a good probability where we see it through the entirety of 2022.”
The Covid-19 Omicron variant has spread rapidly around the country, escalating staffing problems for manufacturers as substantial numbers of factory employees call in sick or quarantine. Whirlpool said it has experienced similar difficulties, with cases at its factories following local patterns.
Whirlpool said consumers have kept ordering products but supply chain constraints have made it hard to fill orders on time. Revenue for the quarter ended Dec. 31 was 0.3% higher compared with a year earlier and up 8% from the same period in 2019. Many people have been upgrading kitchens and homes during the pandemic.
Whirlpool is paying more for input costs, such as raw materials, labor and transportation, Mr. Bitzer said. Its cost of goods sold rose 7%.
Those higher costs weighed on its profit. Net income in the quarter fell 40% to $298 million. Earnings per share declined to $4.90 a share from $7.80 in the same quarter a year ago. The company reported adjusted earnings per share of $6.14, down from $6.67.
Shares rose 0.2% to $208 in after-hours trading.
Manufacturers have said the combination of strong demand and pandemic-related production issues across the entire supply chain have resulted in long-lasting constraints.
Whirlpool said its backlog was now about 4 weeks, compared with a minimal backlog before the pandemic. The backlog has dropped from about 8 weeks at its peak. “In the next couple of months we don’t expect improvement,” said Mr. Bitzer.
Still, the appliance maker said it anticipates demand for its appliances to stay strong this year. It expects revenue to rise up to 6% this year, on top of 13% growth in 2021.
Whirlpool said it had higher input costs of about $500 million in the quarter, and it has been trying to offset rising costs with price increases. The company now expects cost increases to peak in the next several months, instead of last quarter as it previously projected.
Whirlpool said revenue in North America rose 2.6% in the fourth quarter to $3.12 billion.
Write to Austen Hufford at [email protected]
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Appeared in the January 27, 2022, print edition as ‘Whirlpool Sees More Supply Problems.’
