ICS Magazine

As Vaccum Sales Fall, So Do Maytag Maytag Earnings

June 13, 2001
New York (Reuters) -- Maytag Corp. has cut its second-quarter earnings forecast by about 25%, citing lower sales for its Hoover vacuum cleaners.

The Newton, Iowa-based Maytag previously forecast earnings of $.43 a share, which is down sharply from $.92 a share in the year-earlier second quarter. The weakness in Hoover, whose products range from upright vacuums to steam-cleaning vacuums, comes when Maytag is already suffering from lower sales and lower prices for its major appliances like dishwashers and refrigerators, the company said.

In addition to overall industry softening of floor-care products, the scheduled third-quarter introduction of a new line of Hoover vacuum cleaners, with a more powerful motor and design and feature improvements, has led wholesale buyers to await purchasing new products.

All these factors have resulted in lower manufacturing volume and unfavorable absorption of manufacturing costs, Maytag said.

Last week, Maytag said it would buy Amana Appliances' major appliance and commercial microwave oven businesses for $325 million in a nearly all-cash transaction to strengthen its refrigerator business. The deal is awaiting regulatory approval.