A couple of times in my career, I made my way to Benton Harbor, Michigan to visit Whirlpool (WHR).  Not as an analyst, but as a portfolio manager — we managed some of the company’s pension funds.  In particular, I remember a meeting just after the 1987 crash when all of its investment managers met with the firm to reflect on what had happened.  One manager used an analogy to describe the effect of portfolio insurance; a few weeks later I heard another attendee give a speech before a large crowd and use the same analogy.  Sort of like what happens now in the blogosphere.

The chart above begins a few years after that event and looks at the company’s performance.  Yesterday, Whirlpool missed earnings, lowered guidance, and announced job cuts.

You can see from the top panel that this is not a high margin business, and that gross margins are now about half of what they were a decade ago — plus, they worsened in the recent quarter because of high materials costs.

The middle panel shows the sales growth over time, with the big moves being related to acquisitions, including bringing the Maytag Man on in 2006.  The company said that long-term growth in sales is likely to be 5-7%.  Frankly, that looks like a stretch, given that half of its business is in North America (and another thirty percent in Latin America).  For now, the firm sees industry demand falling in the upcoming quarter, Black Friday sales being down, and activity remaining “at recessionary levels.”

The bottom panel illustrates how the stock has done versus the market over the long run.  In absolute dollars, it has lost more than half its value since April of last year.

Many articles of late have focused on the vanishing middle class, the members of which are caught in a whirlpool of global competition, technological change, higher living expenses, and job cuts from firms (driven by economic reality, surely, but also by short-sighted notions of shareholder value).  As long as that vortex continues, firms like this one will struggle.  (Chart:  Bloomberg terminal.)