Whirlpool - spin cycle ends It is all coming out in the wash for Whirlpool investors. After a brutal 2011, the US appliance-maker's shares have returned 119 per cent so far in 2012, fourth-best in the S&P 500. The shares, at $101, are not far off their pre-crisis peaks of 2007. In an industry known for its cyclicality, can the run continue? Whirlpool's operating performance has been transformed over the past year by rapid widening of profit margins in its home market. Last autumn, the company reported that in North America (a region which accounts for more than half of sales) third-quarter revenues declined slightly and operating margins dropped to 2.6 per cent. In this year's third quarter, sales grew - albeit at a merely inflationary pace - but margins exploded, passing 9 per cent. The company credited pricing, mix and capacity cuts initiated in 2011. Whirlpool's second-most important region, Latin America, produced not even half as much profit Asia barely contributed and Europe made a loss. Whirlpool expects more than $7 in adjusted earnings per share for 2012, up from $2 in 2011. The expectations of Wall Street analysts for next year's EPS have hit $9. The stock trades at 11 times that number, which appears reasonable - if the current level of North American profitability can be sustained. But that would be surprising. To put the current margins in perspective, in the third quarter of the boom year 2007, when North American sales were a fifth higher than today, margins were only slightly more than 5 per cent. Yes, Whirlpool's Swedish peer Electrolux has also done well in North America, with margins hitting 6.7 per cent in the most recent quarter, up from 1.5 a year before. But the nasty price competition that has long characterised the industry will reassert itself soon enough. Whirlpool's spin cycle is coming to an end.