Shares of Whirlpool spiked more than 17% Wednesday after the appliance maker issued a strong outlook for 2012, despite a soft fourth quarter.
The company is forecasting earnings per share of $7.30 to $8 — well above analysts’ expectations of $5.85, according to Thomson Reuters estimates.
Whirlpool (, Fortune 500) executives said demand has started to improve and it hopes to build on that momentum. "We do expect 2012 to be a strong year," said CEO Jeff Fettig said during an earnings call Wednesday.
The company instituted a number of cost cutting measures in 2011, including cutting 5,000 jobs, and closing a refrigerator factory in Arkansas. And it expects to continue cost cutting in 2012, although executives didn’t offer any details during Wednesday’s call.
For today, at least, investors were firmly focused on the earnings outlook and analysts say Whirlpool’s price increases and cost cutting efforts will be the biggest drivers in 2012. The stock was the biggest gainer in the S&P 500 Wednesday.
Before breaking out the champagne, it’s worth noting that Whirlpool has been here before and the company faces some serious headwinds, not the least being its roster of competitors creditreport. That includes ElectroluxAB (), which reports earnings Thursday, LG, Samsung and General Electric (, Fortune 500).
Whirlpool cutting jobs
"It’s a pretty ambitious outlook," said Longbow Research analyst David MacGregor. "I think this excitement is going to be short lived."
MacGregor said a big chunk of the volume in Whirlpool Wednesday was likely short covering — reversing bets that the stock will fall. "There were a lot of people short going into the [conference] call," he said.
Still, Whirlpool ended 2011 with a solid balance sheet: $1.1 billion of cash is nothing to sneeze at.
"While we view 2012 guidance as a potential positive for the stock, we believe further detail is needed," said JPMorgan analyst Michael Rehaut in a research note.
Whirlpool’s biggest customers include Sears Holdings Corp. (, Fortune 500). Lowe’s (, Fortune 500), Home Depot (, Fortune 500) and Best Buy (, Fortune 500).
Federal Reserve regional bank presidents provided unprecedented disclosure of their wealth, revealing assets ranging from a Missouri farm and Texas ranchland to stocks and Treasury Inflation Protected Securities.
The officials, who oversee Fed operations ranging from bank supervision to emergency lending, disclosed the documents today in response to requests from Bloomberg News under the Freedom of Information Act. The regional banks said they weren
Sales of previously owned homes rose to an 11-month high in December and the supply of properties on the market dropped to a near 7-year low, an
industry group said on Friday, pointing to a nascent recovery in the housing market.
The National Association of Realtors said existing home sales increased 5 percent month over month to an annual rate of 4.61 million units. November’s sales pace was revised down to a 4.39 million-unit pace, previously reported as a 4.42 million-unit rate.
Economists polled by Reuters had expected sales to rise to a 4.65 million-unit sales pace. Sales in December were up 3.6 percent from a year ago. A total of 4.26 million homes were sold in 2011, up 1.7 percent from the prior year.
The third straight month of gains in sales added to hopes that a tentative recovery in the housing market was starting take shape, but progress will be painfully slow given a glut of unsold properties that is weighing down on prices.
Federal Reserve Bank of St. Louis President James Bullard pointed out pitfalls in a Fed plan to forecast interest rates, highlighting a debate among officials on whether the move will provide clarity about policy.
Bullard told reporters on a conference call yesterday that
Payroll growth in the U.S. beat forecasts in December and the unemployment rate dropped to the lowest level in almost three years as the economy gained strength heading into 2012.
The 200,000 increase followed a revised 100,000 gain in November that was smaller than first estimated, Labor Department figures showed today in Washington. The jobless rate unexpectedly fell to 8.5 percent, while hours worked and earnings climbed.
Friday’s stronger-than-expected December U.S. jobs growth figures drew a sharp contrast with European numbers, but staffing executives who track labor demand on both sides of the Atlantic caution Europe’s impact on jobs in the United States may yet prove deeper than it has so far.
Executives in the temporary staffing and employment services field say anxiety about a likely recession in Europe keeps cropping up in conversations with clients and, in some cases, is putting hiring plans on hold.
Faced with falling sales and profits in Europe, multinational clients may look for offsetting savings in other markets, including the United States.
Randstad Holding NV (RAND.AS: Quote, Profile, Research, Stock Buzz), the world’s second-largest temporary staffing provider by revenue, offers one anecdote to illustrate how Europe weighs on U.S. jobs.
Randstad’s recruitment outsourcing business, SourceRight Solutions, which handles large-scale hiring of as many as 500 people at a time, has a banking client that tentatively plans aggressive expansion in 2012. But the client’s plans are being held hostage by Europe.
“There’s still caution around Europe and how they could impact the U.S.,” said Joanie Ruge, Randstad senior vice president and chief employment analyst. “That is (clients’) biggest concern right now, though they seem optimistic about all the economic indicators in the U.S. moving in the right direction.”
Uncertainty persists even as the U.S. economy improves by many measures. U.S. manufacturing grew at its fastest pace in six months in December - in sharp contrast to the euro zone. Pending home sales are the highest since April 2010 and U.S. consumer confidence is at an eight-month high.
Friday’s employment report improved that picture. The U.S. economy added 200,000 non-farm jobs last month, 50,000 more than expected, and the jobless rate slipped to 8.5 percent, the lowest since February 2009.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Non-farm payrolls graphic: link.reuters.com/qyn85s
Jobless rate graphic: link.reuters.com/vyn85s
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
FEWER FINANCE JOBS
Recruitment in financial services has slowed and is likely to be “lighter” this year, said Scot Melland, Chief Executive of Dice Holdings Inc (DHX.N: Quote, Profile, Research, Stock Buzz), which runs specialized jobs websites focused on professional categories.
“We’ve seen job postings for the industry as a whole decline over the last six months,” Melland said. “It’s really caused by the uncertainty that the industry is facing (from) the European debt crisis and some regulatory uncertainty here in the United States cheapest personal loan rates.”
By contrast, technology workers remain in demand and energy markets are looking at record job growth in 2012, according to Dice.
Friday’s report showed an unexpected decline in temporary help payrolls, which are historically a strong predictor of wider labor trends. But staffing industry insiders said the dip does not square with their own business and could be an anomaly that reflects seasonal factors.
Demand for temps has been steady if unspectacular, said Joel Capperella, vice president of marketing for Yoh, a Philadelphia-area staffing company that focuses on professional categories such as finance and technology and whose clients include SAP AG (SAPG.DE: Quote, Profile, Research, Stock Buzz).
“We’re hopeful the pace will pick up a little bit,” Capperella said, adding that Europe was so far not affecting specific workforce decisions, but was a factor in overall client confidence.
“Capital is still held close to the vest, but we do see it flowing a little bit more freely,” he said.
CURTAILED SPENDING
Tig Gilliam, who heads North American operations for Adecco SA (ADEN.VX: Quote, Profile, Research, Stock Buzz), the world’s leading staffing company, said Adecco is expecting “significant pressure” in Western Europe, which may already be in recession. Even strong markets, such as Germany, are expected to slow, although developing markets in Eastern Europe are likely to grow this year.
Gilliam sees a risk in underestimating the effect of Europe’s slowdown on the U.S. economy. Large employers, instead of investing to accelerate growth, may curtail spending to boost profits in markets that are holding up relatively well, he said.
“If you go to a U.S. multinational company and they look at what they’re facing in Western Europe in the next year, it automatically translates into that much more pressure on the markets that are performing,” he said. “They’ve got to find how much more they can save because they have a hole in Europe to dig out of from a profitability perspective.”
Staffing company shares were mixed on Friday. Among the largest U.S.-listed shares, ManpowerGroup (MAN.N: Quote, Profile, Research, Stock Buzz) and Robert Half International Inc (RHI.N: Quote, Profile, Research, Stock Buzz), were both modestly lower in midday trading, while Kelly Services Inc (KELYA.O: Quote, Profile, Research, Stock Buzz) rose.
In European trading, Adecco, Randstad and London-listed Michael Page International Plc (MPI.L: Quote, Profile, Research, Stock Buzz) were up slightly.
A man from St. Louis County is the second person to seek damages from Schnucks after falling ill during an E. coli outbreak linked to lettuce sold at local stores, according to a lawsuit filed Thursday in circuit court.
In mid-October, Charles Meyer, 61, ate romaine lettuce and other salad bar items several times from the Schnucks in Cool Valley. Meyer later developed an E. coli bacterial infection and was treated at Mercy Hospital in Creve Coeur, where he stayed in the cardiac unit for several days.
Meyer has not regained his previous health and strength since the illness, according to the lawsuit.
Mary Kozlowski filed suit earlier this month against Schnucks after she suffered permanent kidney damage from an E. coli infection after eating salads from the Des Peres Schnucks.
Federal health officials tagged romaine lettuce as the likely culprit of the E on line pay day loans. coli outbreak that sickened 60 people across 10 states this fall. Investigators determined that romaine lettuce from salad bars at nine Schnucks locations was the most common denominator in the illnesses.
The contamination probably occurred at a farm before the lettuce reached the stores, according to a report from the federal Centers for Disease Control and Prevention.
Both lawsuits also name Vaughan Foods of Oklahoma, which supplies romaine lettuce to Schnucks. The plaintiffs are represented by the law firms Aleshire Robb in Springfield, Mo., and Marler Clark in Seattle.
White Castle, a 90-year-old hamburger chain known for its square “slider” burgers, is sipping on the idea of offering alcoholic beverages as it tests beer and wine sales at a restaurant in Indiana.
The food famously craved by stoners in the 2004 movie “Harold & Kumar Go to White Castle” can be had with a glass of wine or a domestic or seasonal beer at a Lafayette, Ind., restaurant that fuses a conventional White Castle with a new concept for the company called Blaze Modern BBQ. Wine costs $4.50 and beers start at $3.
“This was something that customers had been suggesting,” said Jamie Richardson, a spokesman for Columbus-based White Castle System Inc. “They thought that beer and wine might go nicely with the barbecue that was available at Blaze. We’re certain that we might have some customers who might enjoy some sliders and a beer or wine as well.”
White Castle’s test with those beverages was first reported in Wednesday’s editions of The Columbus Dispatch.
Other fast-food restaurants also are dabbling with alcohol. Earlier this year, Burger King opened the Whopper Bar South Beach, a restaurant in Miami Beach offering beer, and Starbucks Corp. has been testing beer and wine at a few sites.
The companies see alcoholic beverages as a growth opportunity after years of flat sales, said David Henkes, a vice president with the Chicago-based food research firm Technomic. “Alcohol is one of those things that is extremely profitable to the operator,” he said.
White Castle’s beer and wine tryout is part of a broader experiment with three new concepts that the company has been studying for a little over a year, Richardson said Wednesday. Besides Blaze Modern BBQ, there’s also an Asian food brand, Laughing Noodle, at a White Castle in Springfield, Ohio, and a triple-decker sandwich concept, Deckers, in Lebanon, Tenn.
Customers have had a “very positive” reaction to the alcoholic beverages offered in Indiana, but for now, White Castle is considering only whether to expand them to the two other co-branded restaurants, Richardson said.
White Castle would face challenges trying to roll out beer and wine on a wider scale, Henkes said.
“What we find with fast-food places is, there’s very strict regulations around training. Typically, a lot of the employees in fast food are under 21, so you get into some service issues,” he said. “You get into some inventory issues. You get into whether distributors are willing to deliver to you because you’re generally not doing a whole lot of volume in these categories.”
Adding beer and wine to the menu sounds fine to lifelong White Castle fan Jim Kreml of Elk River, Minn. _ even though he’s a teetotaler. “I know my wife would love that because she is a wine drinker,” said Kreml, 47, the operator of a chimney-cleaning business who acknowledged he eats at the restaurants “a couple of times a week.”
Kreml, named in 2009 to White Castle’s Cravers Hall of Fame, said Wednesday that he would expect alcoholic beverage options to be popular with many slider aficionados. “If they’re of age and they drink that already, I think they’d be happy with that. As long as they’re responsible and don’t sit in there, and that’s not party time,” he said.
Peruvian Cabinet chief Salomon Lerner resigned Saturday after less than five months in the post and was replaced by the interior minister, who inherits an unresolved dispute over the country’s biggest mining investment.
The reason for Lerner’s resignation was not explained, but he was recently involved in failed attempts to negotiate an end to protests that stalled the $4.8 billion Conga gold mining project, which has been plagued by increasingly violent protests.
His resignation letter, posted online by the newspaper La Republica, does not make direct reference to the conflict but hints Lerner was unhappy with the government’s handling of it.
As Cabinet chief, Lerner wrote in the 1 1/2-page resignation letter, “our direct mandate has been dialogue and the seeking of consensus to avoid confrontation between Peruvians.”
After just one day of talks that Lerner led with local officials who fear the Conga project could taint and diminish water supplies affecting thousands, President Ollanta Humala on Dec. 5 called a state of emergency in four affected northern provinces for 60 days.
Lerner’s replacement, Interior Minister Oscar Valdes, is a 62-year-old former army officer who quit the military as a lieutenant in 1991 and became a successful executive at various businesses in the southern coastal city of Tacna, most recently a trucking company and pasta producer.
Humala, 49, was a student of Valdes in the 1980s at Peru’s military academy.
Humala, who canceled a trip to Argentina for the Saturday inauguration of President Cristina Fernandez, had no immediate comment on the change.
A successful businessman of Jewish descent, Lerner was twice campaign manager for the center-left Humala, a former army officer who lost the 2006 race and then won election last June.
The fate of the Conga project, whose principal owner is U.S.-based Newmont Mining Corp., is considered key to prospects for other mining investments in Peru, which gets 61 percent of export income from the sector.
A windfall tax that the industry agreed to, and that Lerner played a key role in brokering, is helping to underwrite social welfare programs that Humala promised during the election campaign.
Premier Mario Monti urged lawmakers Tuesday to accept his financial rescue package, including new and higher taxes, saying Italy had risked running out of money to pay state salaries and pensions.
Lawmakers on the right and left have been grumbling over his 2-day-old rescue plan, including pension reforms to make Italians work far longer and a revived home property tax.
Monti’s rescue plan, approved by his Cabinet on Sunday aims to pull Italy back from the brink of default on its staggering sovereign debt, a scenario that could doom the eurozone and worsen economic crises across the globe.
“Parliament is sovereign, time is short, the room to maneuver is very little,” Monti said on a state TV talk show when asked about political leaders’ insistence in Italy that the austerity plan be softened.
He said it is “premature” to decide if his 3-week-old government would resort to a confidence vote in a bid to get his rescue recipe approved by Parliament quickly and intact.
With no political base in Parliament _ Monti and his ministers are all technocrats asked to save Italy’s finances _ the government would topple if it loses a confidence vote, a prospect that could trigger catastrophe in global markets.
Monti, an economist and former EU commissioner, announced emergency measures on Sunday that seek to save euro30 billion through austerity measures and reinvest euro10 billion of savings from those measures to enhance growth, which has been stuck at zero for a decade.
Much of the austerity strategy hinges on new or higher taxes, such as the higher excise tax on gasoline and diesel fuel, which already took effect Tuesday. News reports said it would mean it would cost consumers an extra euro5 or euro6 (nearly $7-8) every time they fill up their car.
Monti called the hike in fuel taxes “indispensable” and needed to help keep local public transport functioning.
“We didn’t have to look far. Greece represented what could have happened to Italy,” Monti said, evoking the drastic situation of its fellow eurozone member across the Adriatic.
“We lived well, consuming the wealth produced by past generations instead of producing more,” he said. Under existing pension system reforms over the last decade or so, many Italians could retire at as much as 80 percent of pay in their mid-50s. With Italians enjoying exceptional longevity, the pension payments are becoming nearly unsustainable.
Italy’s public debt is amounting to a staggering euro1.9 trillion, or 120 percent of its GDP.
Asked if Italy had risked being unable to pay its public servants, Monti replied, grimly: “It was certainly possible” that salaries as well as pensions ran that risk.
On Tuesday, the government approved the release of euro4.8 billion ($6.4 billion) from state coffers to fund strategic infrastructure projects aimed at stimulating economic growth. The funds will pay for highway projects, high-speed railways and retractable underwater barriers to help protect Venice from flooding.
Economists have mixed views on how effective infrastructure programs are for spurring economic growth, with most favoring privately funded projects for better stimulus. Still, longer-term projects such as railways usually require state funding because the investment period is too long for many investors.
Sunday’s Cabinet emergency decree allows the funds to be released immediately, but Parliament must still convert the measures into law.
The new funding includes euro2 billion to upgrade the Treviglio-Brescia and Milan-Genoa railway lines, both in the north, to high-speed, euro598 million for highways, and euro600 million for the Venetian lagoon mobile barriers, a project already more than two years behind schedule due to financial problems and designed to protect Venice from periodic high tides. The projects are expected to stimulate growth by putting unemployed people to work and to keep construction contracts flowing.
Unicredit economic analyst Chiara Corsa said the measures appear “sufficiently bold” to allow Italy to balance its budget by 2013,” even with recession looming.
Powered by WordPress -- XHTML 1.0