First Time in 70 Years, This Issuer Suddenly Halts Dividend Payments

Jakarta, CNBC Indonesia — The century-old US furniture company, Whirlpool, has paid dividends through 10 US recessions and every global crisis since the 1950s. However, the company’s financial crisis has become so severe that it has suspended those payments until further notice. Citing The Wall Street Journal, on Friday (8/5/2026), Whirlpool shares plunged more than 20% before stabilising at a 12% drop on Thursday, as Wall Street analysts urged executives to provide clarity on the financial picture. Shares have fallen more than 80% over the past five years due to shrinking company cash flows, which are insufficient to pay investors and service debt. Last year, Whirlpool slashed its dividend by nearly half. “We want to resume dividend payments as soon as possible, but clearly, this is a board decision,” CEO Marc Bitzer told investors and analysts during the earnings conference call, quoted from The Wall Street Journal. He continued that Whirlpool essentially needs sustainably better operating margins, and the company wants to continue paying down its debt. To that end, Whirlpool has raised prices this year across all washing machine, dryer, refrigerator, and cooker products. Additionally, the company plans to raise them again in the summer. Bitzer defended the strategy in the conference call, saying the company must cover three years of uncharged cost inflation to customers. Bitzer then acknowledged that Whirlpool’s price increases are likely to exceed those imposed by competitors. “We also have many new products, which I believe deserve higher value,” he said. Whirlpool blames the US-Israel-Iran war for driving US consumer confidence to its lowest point in 50 years, with the impact of rising oil prices adding to ongoing concerns about living costs. The company’s organic net sales fell 6% year-on-year in the first quarter, and adjusted earnings, which Wall Street estimated at 38 cents per share, instead reported a loss of 56 cents per share. The company paid US$300 million in dividends last year, marking the 70th year of quarterly payments to investors since its founding in 1955. However, in August, as the company struggled with heavy debt burdens, it cut dividends for the first time in decades. Now, at least temporarily, those dividends have been eliminated. Whirlpool’s origins date back to 1911, when entrepreneur Lou Upton founded a company to sell electric-powered wringer washing machines. The company later expanded its products to other appliances like garbage disposals and clothes dryers, outperforming competitors that were acquired or went bankrupt. Currently, Whirlpool positions itself as the last major US-based kitchen appliance and laundry machine company. Its main competitors are Korean giants Samsung Electronics and LG Electronics, along with GE Appliances, now owned by China’s Haier Smart Home. Those competitors have expanded their US manufacturing operations in recent years, and Whirlpool says it needs cash for its own capital investments. Last month, the company said it would spend US$60 million on a new factory in Perrysburg, Ohio, where it will produce components and sub-assemblies for washing machines and dryers. Whirlpool tried to strengthen its finances earlier this year by issuing new shares worth US$1.1 billion, but the tactic drew sharp criticism from investor David Tepper, whose Appaloosa Management is a major shareholder. He criticised management for diluting shareholder value and said the company should consider partnerships or mergers with tariff-burdened competitors. Whirlpool is relying on tariffs to save it, although it has repeatedly stated this since President Trump returned to office. Bitzer said previous tariff policies, based on the amount of steel used in an appliance, “left many loopholes for potential non-declaration of full actual costs.” The simplified policy that took effect in April applies a flat 25% tariff on the full value of an appliance, which Bitzer says gives Whirlpool an advantage over foreign competitors as expected.