- The Washington Times - Wednesday, February 5, 2003

Here is a look at Wednesday's top business stories:

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Whirlpool posts fourth-quarter loss

BENTON HARBOR, Mich., Jan. 5 (UPI) — Whirlpool Corp., the nation's largest home-appliance maker, said it posted a fourth-quarter loss due to charges for restructuring and aircraft leases it holds.

The company, which makes washers, ranges and refrigerators, reported a fourth quarter net loss of $29 million, or 42 cents a share, compared with a net income of $21 million, or 31 cents a share during the same period a year earlier.

Excluding items, Whirlpool said its profit rose to $1.64 a share from $1.58 in fourth quarter 2001.

Analysts on Wall Street were expecting the appliance maker to post a net income of $1.64 a share, according to Thomson First Call.

During the quarter, the company recorded restructuring and related charges of $107 million pretax, or $84 million after-tax. The charges relate to manufacturing rationalization initiatives in North America, Europe, Latin America and Asia.

Whirlpool said due to the decline of the U.S. equity markets and the resulting lower value of the company's pension fund assets at Dec. 31, 2002, the company was required to record an additional minimum pension liability. As a result, the company recorded a $151 million, after tax, non-cash charge to equity in the fourth quarter.

Back in December, Whirlpool said it would take an after-tax charge of $68 million, or 62 cents a share, in the wake of United Airlines parent UAL Corp.'s bankruptcy filing, due to the falling value of aircraft leases it holds.

Net sales rose 11 percent to $2.9 billion from the prior year period. Excluding consolidated sales from the company's acquisitions in 2002 — Polar S.A. of Poland and Vitromatic S.A. de C.V. of Mexico — and the impact from currency translations, net sales improved 7 percent.

David R. Whitwam, chairman and chief executive officer, said, "Despite the economic uncertainties in virtually every market in which we compete worldwide, our operations delivered record sales and a solid operating performance.

"Much of the improvement is due to Whirlpool's brand and innovation strategies and the success of our new product introductions in every part of the world. During the quarter, we also recorded final charges for the company's global restructuring effort that began in December 2000. When fully implemented, the restructuring is expected to reduce annual costs by more than $200 million. The fourth-quarter contributions from restructuring, productivity and innovation have strengthened our global business portfolio and positioned our operations for continued growth in 2003," Whitwam said.

The company said its North America sales were a record for the company — Europe and Asia posted improved sales and operating profit —Latin America operating profit improved significantly from the prior year.

Whirlpool North America delivered record sales of $1.9 billion during the quarter with a 16-percent improvement from the prior year period, or 9 percent excluding Whirlpool Mexico. Much of the improvement was based on the market success of products introduced in 2002 by the Whirlpool and KitchenAid brands.

The company said its U.S. appliance industry unit shipments increased 7 percent compared to the prior year.

Whirlpool Europe's sales rose 13 percent to $623 million, or 2 percent excluding currency translations, in a market where industry unit shipments declined by 3 percent.

Whirlpool said its Latin America's performance was affected by economic and political factors in Brazil and throughout the region. Sales declined 12 percent to $316 million, or up 9 percent excluding currency translations.

Looking ahead, Whitwam said, "Entering 2003, economic uncertainty continues in most markets in which we participate. Nevertheless, based on the ongoing savings and efficiencies resulting from our completed restructuring initiative and other productivity efforts, Whirlpool is well positioned to manage these uncertainties."

The company said based on current economic and industry forecasts for markets around the world, it expects full-year earnings in 2003 to be in the range of $6.20 to $6.40 a share.

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Monsanto posts profit

ST. LOUIS, Feb. 5 (UPI) — Agrochemical giant Monsanto Co. said its fourth-quarter net income was lifted by double-digit increases in seed and genomics sales that helped offset a decline in its trademark herbicide business and persistent economic woes in Latin America.

The company, which makes the top-selling Roundup herbicide and operates a global seed and biotech crop business, said its fourth quarter net income rose to $61 million, or 23 cents a share, from a net loss of $104 million, or 40 cents a share during the same period a year earlier.

Analysts on Wall Street had expected the company to post a net income of 29 cents a share, according to Thomson First Call.

In the fourth quarter of 2002, the company said it recorded net aftertax restructuring items of $20 million, or 8 cents a share, compared with net aftertax restructuring and other special items of $86 million, or 34 cents a share, in the fourth quarter of 2001.

Results in the fourth quarter of 2001 also included a net charge for litigation matters of $39 million aftertax, or 15 cents a share.

Net sales improved 1 percent to $1.22 billion from $1.20 billion a year ago.

The slight improvement in the fourth-quarter sales was the result of increased demand for the company's biotechnology traits and strong corn seed sales in the United States, which was largely offset by lower sales of branded Roundup in Brazil and the United States.

Frank V. AtLee, chairman and interim chief executive officer, said, "Monsanto's shift to a company fueled by its growing technology traits and seeds business was evident in our fourth-quarter results, although increases in those businesses were mostly offset by reduced sales from our branded Roundup herbicide in Brazil and the United States.

"We implemented a plan with our customers to reduce the risk of doing business in Latin America in 2002, and we're well positioned for a return to more normal operations in that region. Our focus on improving working capital investments in 2002 allowed us to exceed our free cash flow target," he said.

Looking ahead AtLee said, "The actions taken in Latin America during 2002 have set the stage for Monsanto to realize solid business results in 2003. Increased revenues and gross profits from seeds and traits are expected to help to offset the projected decline in gross profit from Roundup herbicide."

The company said full-year 2003 earnings per share are expected to be in the range of $1.20 to $1.40, excluding the cumulative effect of the new accounting standard and the resulting increase in depreciation expense.


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