BENTON HARBOR, Mich. (AP) -- Whirlpool Corp.'s fourth-quarter earnings rose 80 percent mostly on lower costs and an income tax benefit, but the world's biggest appliance maker said it is raising prices to help deal with higher raw material costs.
The need for price hikes was echoed by Swedish home appliance maker Electrolux AB earlier on Wednesday, when the company reported that its fourth-quarter net income rose 2 percent.
Like many companies, Whirlpool's battle with rising material costs has been an ongoing concern. The maker of appliances under brands including Maytag, KitchenAid and others noted that its cost-cutting measures, improved productivity, higher unit volume and lower incentive compensation were offset by both increased material costs and lower product prices in the fourth quarter.
Chairman and CEO Jeff Fettig gave a somewhat mixed forecast for the year, saying in a statement that the company expects "positive but uneven demand" around the world in 2011.
Whirlpool's stock fell $2.94, or 3.4 percent, to $82.48 in premarket trading. Over the past year, shares of the Benton Harbor, Mich., company have traded between $71 and $118.44.
During the fourth quarter, Whirlpool said its sales fell in both North America and Europe, but strength in Latin America and Asia helped offset those weaknesses.
The company earned $171 million, or $2.19 per share, in the quarter. That's up from $95 million, or $1.24 per share, a year earlier. Revenue rose 4 percent to $5.04 billion from $4.86 billion.
Removing a gain of 8 cents per share related to the sale of a brand, earnings were $2.11. Adjusted earnings were $1.67 in the prior-year period.
Analysts polled by FactSet expected $2.26 in profit on $4.87 billion in revenue.
Whirlpool's North American sales fell 1 percent to $2.6 billion in the quarter because of lower production volume and higher material costs. Sales in Europe dropped 4 percent to $922 million, partly on foreign currency exchange differences.
Better results were reported in Latin America and Asia. Latin American sales rose 18 percent to $1.4 billion on tax credits and cost reductions, while sales in Asia rose 9 percent to $204 million.
While expenses mainly offset sales gains, the company's profit was helped by a $46 million tax benefit.
For the full year, Whirlpool earned $619 million, or $7.97 per share, up from $328 million, or $4.34 per share, in 2009. Revenue rose to $18.37 billion from $17.1 billion.
Adjusted earnings were $9.65 per share compared with $5.01 per share a year earlier.
Looking ahead, the company expects 2011 profit between $12 and $13, including $4 per share in U.S. energy tax credits. Analysts expect $9.15 per share in profit, excluding items.
Whirlpool said it recently raised prices, but did not specify in what regions the price hikes were made. Electrolux, which makes refrigerators and vacuums, said it plans to make a general increase in its own prices in North America, while price increases in Europe will be more selective.
The appliance makers are not the only ones to recently announce price increases. Last week Colgate-Palmolive Co. and Procter & Gamble Co. said commodity costs are rising more than expected and that they would likely implement price increases on some of their products.