Whirlpool CEO Marc Bitzer is feeling “cautiously optimistic” headed into the second half of the year after a second quarter — and June performance — that he concedes was far better than the team expected.

“June demand was globally stronger then we could have anticipated,” Bitzer told Yahoo Finance in an interview. “First of all, the back end of the year why we are cautiously optimistic it comes from our June, and we see really strong order books for July into August, and we’re profitable so that’s the optimistic part. The cautious part is the entire COVID scenario and what it means for consumer confidence and unemployment, and what that means for buying behavior, and is government programs start to taper off. And frankly, in particular to the U.S. market, pre-election is usually not the best time for consumer confidence. So put that all together, we are a little bit cautious about the rest of the year, but right now frankly short-term we are optimistic.”

Whirlpool performed far better than Wall Street estimates for the second quarter, which hit after the closing bell on Wednesday.

  • Net Sales: $4 billion versus estimates for $3.62 billion

  • Gross Margin: 15.6% versus estimates for 16.5%

  • Diluted EPS: $2.15 a share versus estimates for 99 cents a share

  • Full Year Sales Guidance: decline of 7% to 12% (previous: organic sales decline of 10% to 15%)

Housing market’s tailwinds

Despite the COVID-19 pandemic hammering the finances of many households, Whirlpool finds itself staring at an interesting tailwind into the second half of the year. The U.S. housing market, believe it or not.

The average rate on a 30-year fixed rate loan dipped below 3% earlier this month for the first time since records started way back in 1971. That is beginning to fuel a surge in the buying of existing homes among those that are working, which could spur upgrades to kitchen appliances. Existing home sales in June alone spiked 21%, the National Association of Realtors reported on Wednesday. The gain marked the best one-month showing since 1968.

Whirlpool appliances are offered for sale alongside other brands at a Home Depot store. (Photo by Scott Olson/Getty Images)

Low mortgage rates could also cause homebuilders to ramp up the building of new homes to entice buyers, which would also benefit building material players such as Whirlpool. Couple that with record low interest rates from the Federal Reserve encouraging big ticket purchases by consumers on credit, Whirlpool’s outlook may not be as mixed as some investors think (the stock has lagged the S&P 500 by 1% year-to-date, per Yahoo Finance Premium data).

Bitzer thinks the housing market’s tailwinds should support Whirlpool’s business, so too everyone continuing to be at home more during COVID-19.

“At the very outset [of COVID-19], we saw microwaves and all that kind of essential stuff sell really well,” Bitzer explained. “And as people now realize they are going to be spending a lot more time at home going forward, we see people upgrading appliances or buying new appliances.”

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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